In what might be the first case to make the argument, Navient has asked a federal judge in Pennsylvania to grant its request for a motion for judgment on the pleadings in a lawsuit fled by the Consumer Financial Protection Bureau against the student loan servicing giant because of the Supreme Court’s decision that the leadership structure of the regulator is unconstitutional.
A copy of the motion in the case of CFPB v. Navient can be accessed by clicking here.
The CFPB sued Navient back in 2017, alleging the company “systematically and illegally” failed borrowers at “every stage” of the repayment process. The CFPB alleged that Navient failed to correctly apply or allocate borrower payments to their accounts, steered struggling borrowers toward paying more than they have to on loans, obscured information consumers needed to maintain their lower payments, deceived private student loan borrowers about requirements to release their co-signer from the loan, and harmed the credit of disabled borrowers, including severely injured veterans.
Navient has been fighting the lawsuit for more than three years. In Friday’s motion, it argues that the Supreme Court’s ruling in Seila Law v. CFPB “compels the immediate dismissal” of the CFPB’s suit against Navient. Even a ratification by the CFPB should not be enough to keep the suit going, Navient alleged in its motion. The statutes of limitation on the allegations made by the CFPB in its complaint have expired, Navient said.
“It is now the law of the land that the CFPB’s claims were brought unlawfully, by an agency action beyond proper Presidential control in violation of the Constitution,” Navient wrote in its brief.