ITT Fires Back at Consumer Agency
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowCarmel-based ITT Educational Services Inc. (NYSE: ESI) is rejecting a lawsuit filed by the Consumer Financial Protection Bureau. The career and technical education provider says the federal agency's complaint of predatory lending tactics is “unjustified” and “without merit.” February 27, 2014
News Release
CARMEL, Ind. – ITT Educational Services, Inc. believes that the Consumer Financial Protection Bureau's complaint should never have been filed. The complaint overwhelmingly focuses on issues that are unrelated to consumer finance, and attempts to cast a negative light on aspects of ITT Tech's activities that are extensively regulated by other government agencies. The core claims concern a mere six months of loans, but the Bureau knows that independent third parties provided those loans, and the loan programs ended years ago. Significantly, ITT Tech did not make any money, in interest or fees, from those third-party programs, which were designed to help students during the recent economic downturn. We are disappointed that the Bureau chose to sue rather than work with ITT Tech to address any legitimate concerns about efforts to help students pay for their education.
ITT Tech has been educating students since 1969 – more than a million students to date – and approximately 57,000 students are currently enrolled. Many of ITT Tech's students are veterans, single parents, and others underserved by traditional educational opportunities, which do not fit their life situations. ITT Tech's graduates are employed by many of America's leading companies, and we take pride in our relationships with the wide array of employers that hire our graduates. In fact, more than 14,000 different employers hired an ITT Tech graduate in the last two years.
Contrary to the Bureau's allegations, ITT Tech did not “coerce” its students into unfair loans, or “rush” them through the financial aid process. Much of the complaint relies on “mystery shoppers” – a program that ITT Tech itself voluntarily uses to make sure its policies are being followed by its employees, and to help ensure that errors in implementation are caught and corrected. The “mystery shopper” program gives ITT Tech the information to retrain or even terminate employees as appropriate. The complaint presents excerpts from the “mystery shopper” program without any context, giving isolated anecdotes that are examples of the conduct the program is designed to root out and eliminate.
The complaint is an aggressive attempt by the Bureau, recently created by the Dodd-Frank Act, to extend its jurisdiction into matters well beyond consumer finance. It is unjustified as a matter of law and mistaken as a matter of fact. ITT Tech believes the complaint is without merit and we intend to vigorously contest the Bureau's theories in court.
While we will dedicate the necessary resources to defend ourselves against these meritless claims, the ongoing focus of our more than 10,000 employees across the Nation remains on assisting our students' efforts to complete their programs of study successfully and obtain employment in their chosen fields. We are extremely proud of our work over the last 45 years and we intend to continue our mission of helping people improve their lives through the pursuit of high-quality, career-based education.
About ITT Educational Services, Inc.
ITT Educational Services, Inc. provides accredited, technology-oriented undergraduate and graduate degree programs through its ITT Technical Institutes and Daniel Webster College to help students develop skills and knowledge that they can use to pursue career opportunities in a variety of fields. It owns and operates more than 135 ITT Technical Institutes and Daniel Webster College. ITT/ESI serves more than 55,000 students at its campuses in 39 states and online. Through the Center for Professional Development at ITT Technical Institute, ITT/ESI provides short-term information technology and business learning solutions for career advancers and other professionals. Headquartered in Carmel, IN, ITT/ESI has been actively involved in the higher education community since 1969 and can be found online at www.ittesi.com .
SOURCE ITT Educational Services, Inc.