On November 3, Sens. Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), and Tammy Duckworth (D-IL) penned a letter to the CEO of a student loan servicer expressing concerns about the terms of use on its website. The servicer attempted to impose the terms of service on all users of the website, including individuals that merely browse the website and borrowers that use the website to make payments and view important information about balances, among other features, with obtaining the affirmative consent of the users. However, the senators argued that the terms of use unfairly restricted borrowers’ legal rights and absolved the servicer of liability for potential misconduct, often without the borrowers’ full knowledge. The senators asserted that the terms may be unlawful under the CFPA’s prohibition of UDAAP, as well as other consumer financial laws, as they exploited borrowers’ lack of alternatives and included potentially unenforceable contractual provisions.
The letter concluded with several questions for the servicer, seeking clarification on the enforcement of the terms, the rationale behind specific clauses, and the implications for borrowers who rely on the website to manage their loans. The senators requested responses by November 17.
