A dual fine totaling $6.5 million, and an order to “end these illegal servicing practices” was levied on Citybank, N.A. by the Consumer Financial Protection Bureau (CFPB) Tuesday over student loan servicing. According to the bureau, the bank misled student loan borrowers into believing that they were not eligible for a valuable tax deduction on interest paid on certain student loans. The company also incorrectly charged late fees and added interest to the student loan balances of borrowers who were still in school and eligible to defer their loan payments, among other things, the bureau stated. The bank fines were $3.75 million in redress to consumers and a $2.75 million civil money penalty.
CFPB Takes Action Against Citibank For Student Loan Servicing Failures That Harmed Borrowers