CFPB Files Proposed Settlement With Student Lender Climb Credit
The Consumer Financial Protection Bureau (CFPB) has filed a proposed order for settling its lawsuit against student lender Climb Credit and its investors, including 1/0.
If entered by the court, the order would require Climb Credit and its investors to stop making certain representations in their advertising about the quality of their partner schools’ training programs and their graduates’ hiring rates and salaries, and pay a civil penalty of $950,000 into the CFPB’s victims relief fund, the regulator said in a Thursday (Dec. 5) press release.
The CFPB sued Climb Credit and 1/0 in October, alleging in its complaint that they provided potential borrowers with false information about training programs, hiring rates and salaries; offered loans for training programs that had failed their return-on-investment analysis or that they had not analyzed; and in some cases failed to properly disclose annual percentage rates and loan origination fees.
“Climb Credit and its investors lured people into loans under false pretenses,” CFPB Director Rohit Chopra said in the Thursday press release. “This order will put an end to Climb’s lies.”
Reached by PYMNTS, Climb Credit CEO Casey Powers said in an emailed statement that the company cooperated with the CFPB through the entire multiyear process involving this matter and is glad to reach a settlement so quickly after the lawsuit was announced.
Climb Credit has made changes to its marketing materials, as required by the CFPB’s new guidance, and would have followed any clear guidance about advertising outcomes and survey results if the regulator had provided it in the past, Powers said.
“We wish that the CFPB would have given this guidance through a collaborative method like a no-action letter, because we would have happily collaborated with any new, clear guidance they provided,” Powers said. “However, we are happy to have this matter behind us.”
Climb Credit’s investor, 1/0, did not immediately reply to PYMNTS’ request for comment.
The CFPB has taken several related to student loans in 2024.
The regulator reported Nov. 13 that 63% of borrowers said they had difficulty making their student loan payments and 37% said they had missed at least one payment.
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