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Sallie Mae addresses CFPB relations, funding plans

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Sallie Mae addresses CFPB relations, funding plans

's relationship withthe U.S. Consumer Financial Protection Bureau is off to a strong start,according to Executive Chairman and CEO Raymond Quinlan.

Speakingduring a conference call to discuss second-quarter earnings, Quinlan said aCFPB team had been on site "for a couple of months" earlier in theyear as part of their first review of the company.

"Andwhile the results are confidential, I can say that the CFPB recently completeda review of [Sallie MaeBank's] compliance management system, and management has nofollow-ups at this time," he said.

Companyofficials also provided an update on their funding plans during the call. Theyhad signaled to themarket in April that Sallie Mae was prepared to forego securitization this yearto the extent ABS market spreads did not "get inside of our hurdle rate."Since then, however, the company sponsored two securitizations, including the$657 million SMB Private Education Loan Trust 2016-B earlier in July.

ExecutiveVice President and CFO Steven McGarry cited investor demand and stable marketconditions for issuing the second transaction. The average LIBOR spread on theJuly deal was 136 basis points, 2 basis points below the average spread on theprevious transaction in May.

"We'vealways said that we'll access the ABS market opportunistically, and that'sexactly what we've been doing," McGarry said.

SallieMae expects just under 20% of its loan portfolio to be funded by securitizationby yearend 2018. Retail and brokered deposits accounted for approximately 92%of Sallie Mae's funding base in 2015, according to a recent .