Consumer Bureau Action Tracker

CFPB v. Aequitas Capital Management, Inc., et al.


State

Nationwide

target

Aequitas Capital Management

Topics

Enforcement, Student Loans

In August 2017, the CFPB sued Aequitas Capital Management, and other defendants, for funding “high cost, private ‘Genesis’ loans” that it knew students of the defunct Corinthian Colleges could not afford. A federal judge approved a settlement that allowed for “about 41,000 former Corinthian students [to] be eligible for approximately $183.3 million in loan forgiveness and reduction.” “Aequitas also agreed to forgive all of the Genesis loans that were in default for more than 270 days as of March 2017.”

  • On August 17, 2017, the CFPB sued Aequitas Capital Management, along with other defendants, for alleged wrongdoing in connection with private loans made to students at Corinthian Colleges. [CFPB v. Aequitas Capital Management, case no. 3:17-cv-01278-MO]
  • The CFPB “reached a settlement with Aequitas Capital Management, which allegedly helped Corinthian Colleges carry out its predatory lending scheme.” In the case, “the CFPB claimed that private equity firm Aequitas—which is also winding down its business—had funded or purchased $230 million of high-cost, private ‘Genesis’ loans that both it and Corinthian knew the students could not afford.” Under the CFPB’s proposed settlement, “about 41,000 former Corinthian students could be eligible for approximately $183.3 million in loan forgiveness and reduction. […] As part of the deal, Aequitas also agreed to forgive all of the Genesis loans that were in default for more than 270 days as of March 2017.” [Megan Leonhardt, “Corinthian Colleges Students Set to Get $183 Million Break on Bad Loans,Time Money, 08/17/17]
  • On September 1, 2017, a federal district judge approved the proposed settlement between the defendants and the CFPB. [CFPB v. Aequitas Capital Management, case no. 3:17-cv-01278-MO]

Status

Inactive or Resolved


3:17-cv-01278 8/17/2017 8/17/2017

CFPB Takes Action Against Aequitas Capital Management for Aiding Corinthian Colleges' Predatory Lending Scheme
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-aequitas-capital-management-aiding-corinthian-colleges-predatory-lending-scheme/

  • Consumer Financial Protection Bureau (CFPB)
  • Federal district court case
  • Nonbank
  • $183,300,000
  • 41,000

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