Navient Blasts Pennsylvania AG in Motion To Dismiss

Navient has filed a motion to dismiss a lawsuit brought by the attorney general of Pennsylvania, claiming the state is “piggybacking” off a similar suit filed against the student loan servicing company by the Consumer Financial Protection Bureau.

Pennsylvania’s claims are “merely parrot allegations,” which is “impermissible,” Navient argues in its motion to dismiss.

Claiming that federal law pre-empts the state laws being used as the basis for Pennsylvania’s suit against Navient, the student loan servicing giant was sued last October for “peddling risky and expensive subprime loans that they knew or should have known were likely to default, and while servicing student loans, failed to perform core servicing duties, thereby causing harm to borrowers and cosigners.”

The Pennsylvania AG’s claims “copycat” are “essentially cut-and-pasted from the CFPB’s long-ago filed complaint,” Navient says in its motion, referring to a lawsuit filed almost exactly a year ago by the CFPB. The CFPB claimed that Navient “created obstacles to repayment by providing bad information, processing payments incorrectly, and failing to act when borrowers complained.”

Navient says the federal Truth in Lending Act and the Higher Education Act pre-empt Pennsylvania’s Consumer Financial Protection Act and Pennsylvania’s Unfair Trade Practices & Consumer Protection Law.

“Such wholly redundant claims thus would tax this Court’s resources and burden the parties to existing litigation without providing any conceivable benefit. But permitting such copycat claims would come at a heavy price: they threaten the long-term chaos that is at odds not only with the law’s concern for judicial economy, but with the CFPA’s avowed “purpose” to “enforce Federal consumer protection laws consistently,” Navient claimed in its motion.



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