Cuomo Subpoenas CIT, Columbia Over Lending Conflicts

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Source: bloomberg.com By Laurence Viele Davidson and James M. O'Neill

April 5 (Bloomberg) -- New York Attorney General Andrew Cuomo subpoenaed CIT Group Inc. and Columbia University in a widening probe of conflicts of interest between lenders and college officials in the $85 billion student loan industry.

Cuomo is investigating financial aid officials at Columbia, the University of Texas at Austin and the University of Southern California who owned shares of Education Lending Group Inc., now a subsidiary of CIT. Cuomo also subpoenaed Education Lending Group's Student Loan Xpress unit, recommended by the schools as a "preferred" lender.

"Thousands of loans and millions of dollars" may have been steered to Education Loan Group by college officials, Cuomo spokesman Arthur Harris in New York said today. "Everything is on the table," he added, referring to whether his office will pursue criminal or civil litigation in the matter.

Allegations of conflict-of-interest among individual college officers represent a widening of Cuomo's investigation of the student loan industry, which until now has been directed at schools and lenders. He has claimed the industry is engaged in widespread illegal and deceptive practices, including kickbacks to colleges for directing students to lenders.

Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=a8sFfbr0ZMXs&refer=us

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I believe that Andrew is the son of past Governor of NY State, Mario Cuomo.