The Student Borrower Protection Center (SBPC) sent a letter to the Consumer Financial Protection Bureau (CFPB) warning of troubling business practices and possible borrower harm by Climb Credit, a specialty lender that provides financing for education and vocational training courses, purporting to lend only to borrowers attending schools and programs that it has vetted for quality.
The SBPC’s analysis indicates that Climb may be deceiving borrowers through misleading marketing materials, overstating the extent to which it screens the courses it advertises, skirting fair lending law, and taking advantage of consumers through various other potential breaches of state and federal protections. These violations may also implicate Climb’s partner schools. In response, the SBPC is calling on the CFPB to investigate Climb and its affiliates, prioritize supervision of shadow student debt companies, and establish strong rules to protect borrowers across the student financing lifecycle.
The letter and related analysis of Climb Credit’s practices are part of the SBPC’s ongoing investigation into the growing use of “shadow” student debt — high cost, risky funds borrowed for education outside traditional student lending options. Earlier this year, the SBPC published a report examining this universe of often exploitative shadow debt and credit products targeted toward students attending for-profit schools. Since then, the SBPC has worked to identify and alert borrowers about risks in this market.
Read the Letter: Potential Violations of Consumer Protections by Climb Credit
Read the Blog: The CFPB Must Investigate Climb Credit and Protect Borrowers Across the Dangerous, High-Cost Shadow Student Debt Market