Dive Brief:

• The Consumer Financial Protection Bureau has ordered Discover Bank to repay its student loan borrowers $16 million for improper practices.
• The private student loan servicer allegedly overstated the minimum payment required by borrowers in their billing statements and failed to provide interest payment information.
• As part of a consent order filed by the CFPB, which included an additional $2.5 million fine, Discover Bank did not have to admit to or deny any of the department’s allegations.

Dive Insight:

The Consumer Financial Protection Bureau’s review of Discover Bank found four violations, in total. Besides the interest reporting that limited borrowers’ ability to write off interest payment on their taxes and the billing issues, the CFPB found Discover Bank was unfair in its collection practices, calling borrowers before 8 a.m. and after 9 p.m., and it violated the Fair Debt Collection Practices Act by failing to inform borrowers in default of their rights. Discover accepted the fine and the required refund to about 100,000 borrowers without admitting any wrongdoing. As part of the consent order, it must also change its practices that the CFPB found were in violation of various laws.