CBA Objects to Inaccurate CNN Story

CBA Objects to Inaccurate CNN Story

ARLINGTON, Va., July 14 /PRNewswire/ -- Consumer Bankers Association (CBA) President Joe Belew had the following statement in response to an inaccurate story broadcast by CNN on Wednesday, July 13:

"The Consumer Bankers Association objects strongly to a distorted and inaccurate story that ran on Cable News Network on July 13 regarding student loans. The reporter, Kitty Pilgrim, stated at least five times in a 90-second story that 'banks' receive an extraordinarily high, government-guaranteed interest rate of 9.5 percent on their loans to college students. This is simply not the case.

Banks do not and never have been eligible to receive a guaranteed minimum interest rate of 9.5 percent. Only non-profit and state government-owned student loan organizations were permitted to issue the tax-exempt bonds that funded the 9.5 percent loans. Only those non-profit and state organizations, along with two non-bank lenders that purchased non-profit organizations, receive those taxpayer-funded payments.

In fact, CBA, the principal voice for bank participants in the student loan programs, supports repeal of the 9.5 percent minimum interest rate provision and the use of the resulting taxpayer savings to increase financial aid for students. That is the opposite of what was stated in the CNN story. If someone from CNN had bothered to contact CBA or a bank lender, they would have learned the truth.

CBA calls for the correction of the erroneous story and for CNN to cease its inaccurate portrayal of the banks who proudly participate in the student loan program that makes college possible for millions of American students."

The Consumer Bankers Association is the recognized voice on retail banking issues in the nation's capital. Member institutions are the leaders in consumer financial services, including auto finance, home equity lending, card products, education loans, small business services, community development, investments, deposits and delivery.

CBA was founded in 1919 and provides leadership, education, research and federal representation on retail banking issues such as privacy, fair lending, and consumer protection legislation/regulation. CBA members include most of the nation's largest bank holding companies as well as regional and super community banks that collectively hold two-thirds of the industry's total assets.

Source: Consumer Bankers Association

CONTACT: Fritz Elmendorf of the Consumer Bankers Association, +1-703-276-3879, or felmendorf@cbanet.org

Web site: http://www.cbanet.org/

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