Navient falls after CFPB files proposed order against company

Navient (NASDAQ:NAVI) stock fell 5.8% after the Consumer Financial Protection Bureau (CFPB) filed a proposed order that would permanently ban the student loan provider from servicing federal direct loans.
The proposed order would also prohibit the firm from directly servicing or acquiring most loans under the Federal Family Education Loan Program.
CFPB also fined NAVI $20 million as a penalty and $100 million to redress the borrowers who have been impacted by the actions.
“For years, Navient’s top executives profited handsomely by exploiting students and taxpayers,” said CFPB Director Rohit Chopra.
The company, separately, said it has reached an agreement with the Consumer Financial Protection Bureau.
The firm said it is no longer a servicer or purchaser of federal student loans, and transferred its contract to service government student loans to a third party. Earlier this year, Navient also reached an agreement to outsource student loan servicing of its legacy FFELP student loan portfolios.
The company will oversee its third-party servicing provider to meet all operational terms of the agreement.