INDIANAPOLIS, Ind.–Indiana Attorney General Curtis Hill is one of 16 state attorneys general uniting in a coalition that has filed an amicus brief in a lawsuit brought by the Student Loan Servicing Alliance against the U.S. Department of Justice. The suit is in reaction to an abrupt change in long-standing federal policy.
Historically, states have played the central role in protecting borrowers from service misconduct. Hill stresses that “individual states more effectively look out for their own citizens’ interests than the federal government.”
Types of misconduct dealt with at the state level have included steering struggling borrowers to less-than-optimal courses of action, misapplying payments, and engaging in harassing debt-collection practices.
The coalition’s brief argues that removing states from a central regulatory role would actually increase bad servicer behavior.