The talk of the town (or, at least, of Twitter) this week was the Consumer Financial Protection Bureau and U.S. Department of Education report on private student loans.
Read on for all the news you might have missed this week.
CFPB Report Highlights Private Student Loan Pitfalls
The CFPB report on private student loans highlighted the similarities between the private student loan market over the past few years and the subprime mortgage industry in the lead-up to the Great Recession.
“Subprime-style lending went to college and now students are paying the price,” said U.S. Education Secretary Arne Duncan in a press release on the study. “We still have some work to do to ensure that students who take out private student loans have the same kinds of protections offered by federal loans. In the meantime, if you have to take out a loan to pay for college, federal student aid should be your first option.”
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Walmart Comes Out Against $7 Billion Swipe-Fee Settlement
Several major credit card issuers and merchants reached a settlement over swipe fees recently, but some merchants are towing the line.
Walmart and Target, two of the largest retailers in the U.S., have come out publicly against the swipe-fee settlement, arguing that the agreement doesn’t tackle the larger issue of a dysfunctional swipe-fee system.
“The proposed settlement would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year,” the company said.
Chase to Pay $100 Million for Hiking Card Fees
A class-action lawsuit has been settled, with Chase agreeing to pay $100 million to cardholders who had their required minimum monthly payments raised.
The crux of the suit, which has been ongoing for the past three years, is that Chase penalized any late payments with a high penalty interest rate, making it even harder for customers to manage the balances on their cards.
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Image: NS Newsflash, via Flickr
Kali Geldis Kali Geldis is Credit.com's Deputy Managing Editor. She writes about a wide range of personal finance and credit topics. She previously ran MainStreet.com, the personal finance website powered by TheStreet. She has also worked for The Wall Street Journal as a Dow Jones Newspaper Fund intern and at The Huntington Herald-Dispatch as a reporter.
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Private student loans definitely need scrutiny! I have taken out private student loans out of necessity yet I really regret it. My private lenders were Chase and Sallie Mae, and they refused to work with me when I was facing financial difficulties when I had difficulty making my payments. Thank you CFPB for pointing out these flaws, hopefully there will be remedies for the min the near future.
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