U.S. regulator settles lawsuit against ITT Educational, will not collect $60 mln (updated)

ITT Educational Services

12/08/2019 18:22

(Adds details of settlement, bylines)
    By Pete Schroeder and Jonathan Stempel
    Aug 12 (Reuters) - The U.S. Consumer Financial Protection
Bureau (CFPB) said on Monday it had reached a settlement with
ITT Educational Services Inc over predatory lending practices,
but does not plan to collect any of a $60 million judgment from
the bankrupt for-profit college.
    The proposed settlement stipulates that the bureau will not
seek any funds through bankruptcy proceedings from ITT, citing
the limited amount available to be distributed to former
students. The settlement, filed in the U.S. District Court for
the Southern District of Indiana also bars ITT, which filed for
bankruptcy in September 2016, from providing student loans in
the future.
    The CFPB had sued ITT in 2014, alleging it engaged in
predatory lending practices, pushing student borrowers into
high-cost private loans that they did not understand and could
not afford. ITT closed roughly 130 campuses as it filed for
bankruptcy, amid growing government scrutiny of for-profit
colleges.
    In June, the government announced ITT's affiliated lender,
Student CU Connect CUSO, would stop collecting on $168 million
in outstanding student loans.  urn:newsml:reuters.com:*:nL2N23L1I2

 (Editing by Richard Chang)