CFPB Sues ITT Educational Services

The Consumer Financial Protection Bureau (“CFPB”) has accused the ITT Educational Services, Inc., also known as ITT Tech and Daniel Webster College, with predatory lending. In a lawsuit filed in federal district court in Indiana on February 27, the CFPB charged that in the marketing and financing of its degree programs, ITT engaged in unfair, deceptive, or abusive practices, Truth-in Lending violations and other illegal activities. It is the first enforcement action the CFPB has taken against a company in the for-profit college industry. As the result of numerous ongoing nationwide complaints of high-pressure tactics, false promises and exploitation of students, ITT and others have been the subject of investigations by the Government Accountability Office in recent years. “The consumer bureau will subject the financial products and services offered by for-profit colleges and their partners to the same standards as any other consumer financial product or service,” said CFPB Director Richard Cordray.