The Consumer Financial Protection Bureau announced increased oversight of the companies that act as go-between for student borrowers and lenders
Sallie Mae and other large student-loan servicers -- the companies that act as a go-between for borrowers and lenders -- will soon be getting some regular oversight from the Consumer Financial Protection Bureau, the watchdog agency announced this week.
ProPublica and others have long documented student borrowers’ troubles with the companies that handle the day-to-day collection of student-loan payments and communicate with borrowers.
“Student loan servicers can have a profound impact on borrowers and their families,” CFPB Director Richard Cordray said Monday in a call with reporters. “Given how quickly this market has grown and the recent uptick in delinquency rates, it is important for us to ensure that borrowers receive appropriate attention from their servicers.”
The CFPB has been logging thousands of complaints about the companies that service both private and federal student loans. It has issued a number of reports detailing common complaints, including trouble accessing the loan-repayment options to which they are entitled, problems processing payments, difficulty getting accurate information from servicers, and servicers ignoring the protections due to active-duty service members. Such mistakes can leave already indebted borrowers further burdened with administrative hassles or penalized with additional fees.
Bank-based loan servicers -- such as Wells Fargo or Discover -- are already overseen by the CFPB. But student-loan companies such as Sallie Mae and Nelnet -- so-called “nonbank” servicers -- have long fallen into a regulatory grey area.
The Education Department had authority over their contracts to service federal student loans. And both the CFPB and the Federal Trade Commission had the authority to investigate specific violations of consumer protection laws. But no agency was consistently monitoring for violations.
That will change as of March, when the CFPB will begin providing regular supervision to student-loan servicers with more than one million customer accounts, regardless of whether the loans they service are federal or private.
According to the CFPB, that will likely cover the seven largest non-bank servicers – which together have more than 49 million borrower accounts.
The agency declined to name companies. But the list will likely include Sallie Mae, Nelnet, Great Lakes Educational Loan Services, and FedLoan Servicing/PHEAA -- all of which service large numbers of federal student loans.
Some servicers that work with federal student loans will likely still fall under the threshold for getting the stepped-up oversight. That’s because, as we’ve noted, the Education Department has in the last few years expanded its stable of loan servicers to roughly a dozen.
Nandan Nilekani-led UIDAI has always ducked questions asked through RTI Act citing non-disclosure agreements. The recent information about missing papers of contract value for a French company, however raises serious questions on Aadhaar scheme
Aadhaar or the unique identification (UID) number scheme if often touted as something that will bring transparency in the lives of crores of Indians and reduce corruption. However, when it comes to the same transparency at Unique Identification Authority of India (UIDAI), the de-facto tagging institution, even applications filed under the Right to Information (RTI) Act receive opaque answers. The latest answer from UIDAI about 'missing papers of contract value for Sagem Morpho Security Pvt Ltd (a French company)', however raises serious questions upon the intentions of the authority.
An RTI application filed by Qaneez-e-Fatemah Sukhrani, an urban affairs researcher, sought a copy of memorandum of understanding (MoU)/ contract executed between UIDAI and/or Planning Commission with L1 Identity Solutions Operating Co, currently a subsidiary of French conglomerate Safran Group, Sagem Morpho Security Pvt Ltd, a subsidiary of Safran Group, Ernst & Young, a US company, Accenture Services Pvt Ltd, a US company and ID Solutions company and the tender cost. At the time of award of contract to L1 Identity Solutions Operating Co was a US company.
A reply dated 25 October 2013 from Shirish Kumar, assistant director general and chief public information officer (CPIO) of UIDAI reveals that the value of contract for L1 was Rs33.87 crore and for Ernst & Young it was Rs7.05 crore. With regard to Sagem Morpho Security Pvt Ltd, it states that the “effort is on find the data” about the value of contract awarded. This reply in the matter of Sagem Morpho Security Pvt Ltd is quite intriguing. Notably, L1 has undergone metamorphosis and become part of Safran Group along with Morpho Security Pvt Ltd.
According to a report from Economic Times, the UIDAI is partnering with MongoDB, (formerly called 10gen), a technology company from US which is co-funded by Central Intelligence Agency (CIA). This contract has not been disclosed so far. MongoDB will take data from UIDAI to undertake its analysis. UIDAI is tight-lipped about CIA's role in it. This company's database software is already being used to verify the speed of registration. It is yet to become clear whether this company will be in a vendor relationship directly, or it will operate through some pre-existing entity which is already working with UIDAI as system integrator, said Gopal Krishna, a member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010.
In the past, the Nandan Nilekani-led UIDAI had used excuse like, ‘non-disclosure agreements' for denying information in a number of RTI applications. However, no data available for contract value is something that is really shocking.
In response to a RTI query seeking copies of the UIDAI's contracts with four private companies—two foreign and two Indian—the authority claimed that these could not be furnished since they have signed non-disclosure agreements with them. The UIDAI is set up and functioning without the sanction of law. It enters into contracts with private companies, including foreign ones, pays them out of the exchequer and refuses to furnish copies of the contracts. Are not these contracts illegal? How could the UIDAI sign contracts on behalf of Planning Commission? Assuming, but not admitting that the UIDAI is empowered to enter into the contracts, are not the non-disclosure agreements illegal? How could any office of the government pay taxpayers’ money to private companies and not disclose the contracts (purpose for which the money is paid) to taxpayers?
The UIDAI has been informed that one of the foreign companies has links with intelligence agencies from a foreign country. This information failed to obtain any reaction from the UIDAI. The response to an RTI application seeking information on foreign company contractors was even more inexplicable. The UIDAI stated that it did not know the country of origin of these contractors and is not concerned about such facts. It added that as long as the bidding contractors had an office in India or an Indian partner and had sent a RFP, the Authority would not bother with origins. That is saying a lot about the kind of due diligence UIDAI has done in choosing contractors for “India’s prestigious world’s largest database project” of the country’s biometric and demographic information.
In answer to another RTI query to furnish copies of contracts pertaining to three empanelled Enrolling Agencies (EAs), the UIDAI did not furnish the copies of applications submitted by these companies and minutes of decision to empanel them. Instead, the UIDAI replied stating that the companies “were empanelled as EAs during the year 2010-11 on the basis of eligibility conditions provided in RFE-2010 and subject to satisfying other terms and conditions.”
Such obfuscation is characteristic of the UIDAI’s ‘transparency’. One of the three companies is a tea estate company. How does a tea estate company satisfy ‘eligibility conditions’ for empanelment, as EA is mysterious, until one reads the RFE. The RFE states, “All organizations (single agency/consortium) interested in undertaking enrolment activities for the UIDAI project shall be empanelled under Level T1, provided they meet the general eligibility criteria”. It is a free for all; anyone and everyone can join the melee of the enrolment process to capture biometric and demographic data of the people of this country.
According to Mathew Thomas, a former defence services officer and missile scientist turned civic activist, press and media have reported several instances of fraud and crimes by EAs. "FIRs have been filed. Nothing is known about what happened to these cases. Police and media are equally silent on this, and strangely so. One would have thought that the stories on them would make juicy media stories. The UIDAI too, is not forthcoming on details of these cases. An RTI query elicited a vague response from the UIDAI, almost disowning responsibility for what the EAs do. The Authority claimed that this is the responsibility of registrars, "he said.
Several activists and prominent personalities had already cautioned that the Indian government is allegedly using Aadhaar and its issuer UIDAI to counter the RTI Act. Experts opine that an information revolution in the form of RTI now has a counter revolution in the avataar of UID. The attempt to use Aadhaar to provide government subsidies by a more transparent network is allegedly just a cover up.
Nikhil Dey, leading RTI activist and founder member MKSS has stated in his article in the recently published book by YASHADA titled “Milestone 7: Journey of RTI Act” that, "There are new information laws in the making that give the state control over detailed information about every citizen. There are new draft privacy laws that claim to keep this information secure from the prying eyes of other citizens. There are secrecy clauses embedded into laws on data collection that once again seek to give the custodians of power exclusive control over information. And most threatening perhaps, are legal frameworks that legitimise the use of new technologies of information gathering to watch over every element of people’s lives under the guise of 'good' governance, ‘greater’ security, and ‘safer’ democracies!”
Gopal Gandhi, former governor of West Bengal so incisively cautioned, “We must ensure that tools like the UID must help the citizens watch every move of government; not allow the government watch every move of the citizens.’ As they are today, the RTI and the UID stand on contrary sides of the information debate. If the RTI is a tool of the citizens to control the government and hold it accountable, the UID is a tool of the government to control the citizens.”
Venkatesh Nayak, programme co-ordinator, CHRI, who is researching on this subject, has appealed citizens to invoke RTI to find out details of actions planned by state governments on the basis of the finance ministry’s advice to expand the Aadhaar network where pilots of the controversial UPA government’s subsidy schemes will be rolled out linking UID to social development programmes. “There simply is no information about these issues in the public domain—only the rush and urgency of implementing the pilots. All this is hugely problematic because the government is not doing its mandated duty of complete proactive disclosure of facts and figures relating to the implementation of the UID as is required under Section 4 (1) of the RTI Act,” he had said.
Even before the privacy of a citizen has been properly secured, the central government has gone ahead, putting up personal details of citizens in the technology space where not only others but the government itself can access personal data and misuse or abuse it. So while RTI Act empowers a citizen; the UID’s Aadhaar number scheme empowers the government.
While 3rd December is commemorated as World Disability Day, how many know that RTI could empower the disabled to know about various welfare schemes, grants, concessions and scholarships they are entitled to?
While the Right to Information (RTI) Act is being used as a powerful tool by many of us, there do not seem to be even a handful that uses it to empower persons with disabilities (PWD).
Mysore-based social activist Siddaraju who is associated with the National Federation of the Blind has been steering various campaigns by invoking RTI Act in his fight for justice of disabled people, particularly children. One of his campaigns led to the Mysore Police Commissioner reserving 10 parking spaces for the disabled. Bangalore-based Sakshi Trust has a handbook to guide the PWD to invoke the RTI Act.
The Chief Commissioner for Persons with Disabilities under the Ministry of Social Justice and Empowerment, Government of India is the official who is in charge of the rights, welfare schemes and scholarships for the PWD. As per its website, “The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, enlists facilities that persons with different types of disabilities would be entitled to; and the responsibilities and obligations which are placed on the Government of India, state governments, local bodies and establishments in this behalf. It broadly includes measures for prevention and early detection of disabilities, education, employment, social security, research and manpower development, barrier-free access and preferences and facilities that are available to such persons and the action which needs to be taken to avoid any discrimination against persons with disabilities.”
The RTI Act can be used to find out various schemes and scholarships applicable to the PWDs, under the Ministry of Social Justice and Empowerment as well as at the state and municipal corporation levels. The RTI Act has provided assistance from the public information officer for a person who is sensorily disabled. Sec 7(4) states: “Where access to the record or a part thereof is required to be provided under this Act and the person to whom access is to be provided is sensorily disabled, the Central Public Information Officer or State Public Information Officer, as the case may be, shall provide assistance to enable access to the information, including providing such assistance as may be appropriate for the inspection.’’
Anita Iyer, founder trustee of Ekansh Trust based in Pune, states that the main issues of concern are, “lack of education opportunities both at the primary and higher levels; lack of livelihood and employment opportunities; lack of physical access in buildings and; denial of access to most civil and political rights. This is because PWD are not seen as a powerful vote bank. Hence, they are marginalised and sidelined by the society. They should be made aware of the power of the RTI Act so that the government machinery would give more attention to the rights of the PWD under various schemes. More and more RTI activists and NGOs should come forward to help them in filing RTI.’’
The Office of the Chief Commissioner for PWD has provided an information handbook on the RTI Act 2005, on its website.
It states that:
• this Information Handbook has been prepared in pursuance of Section 4 of the Right to Information Act, 2005 (RTI Act, 2005) to provide information in respect of powers, duties and functions of the Office of the Chief Commissioner for Persons with Disabilities (Office of the CCPD) set up under the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (PwD Act)
• to provide access to information under the control of Office of the Chief Commissioner for Persons with Disabilities and to promote transparency and accountability in the working.
• To provide maximum information suo motu or sources thereof so that people have minimum resort to use of the RTI Act.
• This handbook is useful for the persons with disabilities, their guardians, Voluntary Organisations and individuals working in the field of disability and Central/State Government Organisations.
Bangalore based Sakshi Trust in association with ActionAid India has developed a guide for the PWDs to invoke the RTI Act. It includes “a step wise guide to drafting RTI applications and provides a useful tool to seek information by anyone concerned, an NGO, or even parents. The context of the RTI applications and interventions in this book are made from the perspective of specific issue that a citizen/ disabled person maybe concerned about.’’
The issues the book has addressed through sample RTI application forms pertain to:
• Getting a Disability Certificate
• Getting an allocation in Poverty Alleviation Schemes
• Ensuring barrier free access in Public spaces and offices
• Access to education and related services for PWDs
• Employment opportunities for the disabled
• Getting Assistive Devices
• Ensuring complaint is heard by the Commissioner for PWDs
For each of these issues, the guide book contains model RTI application have been developed that can help you solve the problem. For more information, visit: www.sakshitrust.org.
The guide book states the general reasons for the raw deal that PWDs get in our country:
(a) Lack of awareness and negative attitudes towards people with disability. Very often people with disability are seen as sick persons who need care and comfort
(b) No tradition of / or facilitation for people with disability forming political interest groups at various political levels
(c) Lack of awareness about the governmental administrative structures and how, they can be used by NGOs and people with disability in particular
(d) People employed in the Office of the Commissioner of disability themselves are not well versed in disability issues
(e) State Coordination Committees and State Executive Committees (as specified in the Disability Act of 95) are not yet set up in all states
(f) The strengthening of the disability movement is sorely required
(g) Only a few people with disability are represented in the administrative bodies set up by the Government
(h) Lack of platforms where people with disability represented in governmental committees can share experience with other disability groups, get support, advice and gather information about disability issues
The book states that, “Despite of the shortcomings and challenges stated, the PWD Act (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995: remains a unique opportunity to establish linkages between the administrative bodies and people with disability regarding political issues as well as rehabilitation.’’
The prolific use of RTI Act can further strengthen and make the PWD Act more meaningful and relevant.
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)