Student Loan Servicer Can’t Escape CFPB Doc Request, Judge Says

By Evan Weinberger

A Pennsylvania student loan servicer must comply with a Consumer Financial Protection Bureau investigative demand for documents even as the company seeks relief from an appeals court, a federal judge ruled.

Heartland Campus Solutions, ESCI, would not be harmed by handing over documents sought by the CFPB in an investigation of its student loan servicing operations as its appeal to the U.S. Court of Appeals for the Third Circuit proceeds, Judge Cathy Bissoon of the U.S. District Court for the Western District of Pennsylvania said in an April 17 order. The judge denied the company’s stay request.

The company could ultimately win in its challenge to the CFPB’s June 9 civil investigative demand, and that would provide a sufficient remedy, Judge Bissoon said.

“Should the Court of Appeals reverse the Court’s decision to enforce the CFPB’s June 9 CID, the Court can order that the CFPB return Respondent’s documents, destroy all discovery replies, and prohibit the CFPB from acting upon any information learned from its investigation,” Judge Bissoon wrote.

The CFPB first sent a CID, the first step in an enforcement action, to the student loan servicer in March 2017. After the company, a unit of Atlanta-based Global Payments Solution Inc., challenged the CID as being too broad, the CFPB issued a revised version on June 9 of last year.

Subsequently, the CFPB sought a court order to enforce the CID after the company challenged it, and Judge Bissoon ruled in the bureau’s favor in February. The company subsequently appealed to the Third Circuit, and asked for a stay in the lower court compliance order.

Heartland Campus Solutions, ESCI is represented by Allyson Baker, Alexandra Megaris and Erin Zacuto Cass of Venable LLP. The counsel could not be reached for comment on April 18.

The case is: Consumer Financial Protection Bureau v. Heartland Campus Sols., ESCI , W.D. Pa., No. 17-502, 4/17/18 .

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