The Consumer Financial Protection Bureau filed a lawsuit against ITT Educational Services Inc. on Wednesday claiming the company engaged in predatory lending by pushing its students into high-cost private loans likely to default.
The CFPB suit marks the agency’s first public enforcement action against a company in the for-profit college industry. The agency alleged ITT used high-pressure tactics to push students into costly loans to boost the college’s bottom line and seeks restitution, a civil fine and an injunction against the company.
CFPB Director Richard Cordray said it is the first step against for-profit institutions that allegedly engage in predatory tactics. “We believe ITT used high-pressure tactics to push many consumers into expensive loans destined to default,” Mr. Corday said in a news release. “Today’s action should serve as a warning to the for-profit college industry that we will be vigilant about protecting students against predatory lending tactics,” he said.=