The U.S. District Court for the Middle District of Pennsylvania recently rejected a student loan servicer’s attempt to narrow claims from a CFPB lawsuit regarding the company’s alleged harmful student loan servicing practices. The court denied the servicer’s summary judgment motion, indicating that the parties should finish the discovery process before seeking motions for summary judgment.
This matter stemmed from a January 2017 lawsuit in which the CFPB alleged that certain aspects of the company’s servicing and debt collection practices, primarily related to the servicer’s communications with borrowers at risk of default, constituted UDAAP violations. The servicer filed a motion for partial summary judgment in January 2019, regarding claims that the servicer took advantage of financially struggling borrowers by steering them into forbearance rather than setting up an income-driven repayment plan.
The court held that the servicer’s motion for partial summary judgment was premature because discovery was not complete. Moreover, given the numerous discovery disputes in the case, the court indicated that it would be most efficient for the parties to focus their efforts on bringing discovery to a close rather than filing or responding to summary judgment motions.