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30 state AGs oppose potential ban on state oversight of loan servicers

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30 state AGs oppose potential ban on state oversight of loan servicers

A bipartisan coalition of 30 attorneys general, led by New York's Eric Schneiderman and Colorado's Cynthia Coffman, is urging Congress to reject legislation that would block states from preventing and combatting fraud and abuse by the student loan industry.

The pending version of the Higher Education Act reauthorization includes language to pre-empt state level oversight of private companies that originate, service, or collect on student loans.

Describing the language as "an all-out assault on states' rights and basic principles of federalism," the letter urges Congress to strip the language from House bill and to omit it from consideration in the Senate.

In addition to New York and Colorado, the letter was also signed by the attorneys general of California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, New Mexico, New Jersey, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, and the District of Columbia, as well as the executive director of the Hawaii Office of Consumer Protection.