Corinthian Colleges Inc., the troubled for-profit higher-education company that will be closing operations under a deal with the U.S. Education Department, recently sold a portfolio of student loans for $19 million.
The Consumer Financial Protection Bureau has requested documents related to the sale and Corinthian, based in Santa Ana, Calif., reported in a regulatory filling this week that the CFPB has accused the company of violating the Fair Debt Collection Practices Act and the Dodd-Frank Act.
Corinthian has been under investigation by several federal agencies. In June, the Education Department withheld the company's access to federal aid funds, causing liquidity problems. Corinthian then began liquidating assets by working to sell or close its 107 campuses.
In July, Corinthian agreed to warn prospective students online of its plans to sell most of its campuses. That move was in response to legal action by California Attorney General Kamala D. Harris.
As a condition for entering settlement talks on the FDCPA accusations, Corinthian must stop sales or transfers of private student loans, inform the CFPB of potential asset sales and give students more information about the possible sale or shutdown of its campuses. The company has until Friday to respond to the CFPB.
The case continues a trend of tightened regulatory scrutiny of for-profilt colleges.
Earlier this year, the CFPB filed a lawsuit against ITT Education Services Inc., the consumer watchdog agency's first public enforcement action against a company in the for-profit college industry.
Parent company ITT Technical Institute's stock price has sunk since the filing and company CEO, Kevin Modany, recently announced his resignation. A potential money-raising deal to sell some several of its properties also fell through.
ITT missed its 2013 full year and 2014 first quarter earnings results, as well as a summer deadline for filing its annual financial report with federal regulators, opening it up to potential sanctions from the Education Department, including a cutoff of the federal student aid money that is its lifeblood.