Navient jumps after settling with US CFPB

Navient

12/09/2024 18:39

** Shares of student loan servicer Navient  NAVI.O  jump as
much as 6.5%, last up 5.7% at $15.50
    ** U.S. Consumer Financial Protection Bureau says it has
banned NAVI from servicing federal student loans and orders it
to pay $120 mln for years of student lending failures
    ** Brokerage Jefferies says the move will have minimum
impact on NAVI as it had already reserved $105 mln of the charge
as of Q2 2024
    ** Adds that the move could be a net positive for NAVI, as
it largely closes out the issue and aligns with NAVI's ongoing
strategy
    ** NAVI no longer services or purchases federal student
loans, having transferred its contract to service government
loans to a third party in 2021; this July, co began outsourcing
the servicing of federally subsidized private loans
    ** This is one less legal overhang for NAVI, and we believe
investors will appreciate the news - Jefferies 
    ** As of last close, NAVI shares down 21.3% YTD

 (Reporting by Arasu Kannagi Basil in Bengaluru)
 ((ArasuKannagi.Basil@thomsonreuters.com))