Update on Litigaion Auditx

1501 M Street, NWSeventh FloorWashington, DC 20005Phone: (202) 466-6550Fax: (202) 785-1756www.ppsv.comUpdate on Litigation and Audit Risks FFacingacing SStudenttudent Loan LendersPPtresentatition ffor Student Loan Capital Strategies LLCStudent Loan Industry ForumRobert S. LavetPowers Pyles Sutter & Verville, P.C.rob.lavet@ppsv.comPhone: (202) 872-6747 Fax: (202) 785-17561„„„„„„„Department of Education Review of Schools and LendersLenders re Prohibited InducementsInducements and Borrower ChoiceAs outgggrowth of Cuomo investigation Department sent letters in fall 2007 to numerous colleges and lenders.Letters requestrequest extensiveextensive informationinformation fromfrom July 11, 2005 onon, among other things, financial transactions between lenders and schools.Department continuing program reviews of lenders practices in connectition wiithth prohibited iinducements provisions of HEA.Focus of reviews on compliance with rules that existed prior to July 1, 2008 changes in the regulations.Lack of clarity pre-July 2008 on lenders’ private loan practices as FFEL inducement issue.PPiossiblble sancttiions.Powers Pyles Sutter & Verville PC 2„„„Office of Inspector General –Final AuditAudit RReporteport RRe e FFifthifth Third BankBank(January 5, 2009)Fifth Third held leggal title as ELT to $3 billion dollars of FFEL consolidation loans under 3 separate trust agreements with MSA Solutions, Pacific Loan Processing and Law School ...