Feb 25 Credit card company Discover Financial
Services said it was being probed by the U.S. consumer
financial watchdog over its unit's student loan servicing
The Consumer Financial Protection Bureau (CFPB) has issued a
civil investigative demand to Discover Bank seeking information
regarding certain student loan servicing practices, Discover
said in its annual filing on Tuesday. ()
The unit, Discover Bank, is one of the major private student
lenders that continue to issue student loans in the United
States despite facing increasing competition from the
government, which now issues most student loans.
The CFPB had said in December it would start supervising the
seven largest student loan servicers to ensure fair treatment to
borrowers. The watchdog had pegged the student loan debt at $1.2
The company also disclosed that the Federal Deposit
Insurance Corp (FDIC) has notified it of "potential
deficiencies" in Discover Bank's anti-money laundering program.
The Bank Secrecy Act requires companies to assist government
agencies detect and prevent money laundering.
Discover Bank is cooperating with the agencies and
enforcement action from either could include demands for civil
money penalties, the company said.
Discover Financial shares closed down about a little less
than 1 percent at $56.96 on Tuesday on the New York Stock