News from Attorney General Andrew Cuomo
Department of Law Department of Law
120 Broadway The State Capitol
New York, NY 10271 Albany, NY 12224

FOR IMMEDIATE RELEASE
Albany Press Office / 518-473-5525
New York City Press Office / 212-416-8060

SENATE BANKING COMMITTEE CHAIRMAN AND NEW YORK ATTORNEY GENERAL CALL
ON
TOP 20 US LENDERS TO DETAIL UNDERWRITING CRITERIA

Joint Letter Part of Expanding Student Loan Industry Investigation

Thursday, June 07, 2007 -- United States Senate Banking Committee
Chairman Chris Dodd and the New York Attorney General Andrew Cuomo
have
requested the nations top 20 student loan lenders submit details on
their underwriting criteria in a joint letter sent today.

The letter specifically asks for any information or criteria that go
into setting a loan's interest rate including "college, college
location, graduation rate, historic default rate, race, gender, age,
parental income, credit history and any other factors used or
considered
in an underwriting determinations."

The letter comes just one day after Dodd held hearings before the
United
States Senate Banking Committee on the growing student loan scandal.
In
testimony before the Committee, Cuomo described the private college
loan
industry as the "Wild West" of student loans.

The letter was sent to the following lenders:

SALLIE MAE
CITIBANK - STUDENT LOAN CORP
JP MORGAN CHASE BANK
BANK OF AMERICA
WELLS FARGO EFS
WACHOVIA EDUCATION FINANCE
COLLEGE LOAN COPORATION
ACCESS GROUP
U.S. BANK
EDAMERICA
US BANK ELT NORTHSTAR CAP MRKT SERV
STUDENT LOAN XPRESS
SUNTRUST BANK
PNC BANK
REGIONS BANK
CITIZENS BANK
COLLEGE FOUNDATION INC
AES/PHEAA
NELNET
Kentucky Higher Education Student Loan Corp.

Cuomo's nationwide investigation into the student loan industry has
resulted in agreements with the nation's five largest student loan
providers - Citibank, Sallie Mae, JP Morgan Chase, and Bank of
America,
and Wells Fargo - as well as with Education Finance Partners (EFP) and
CIT. Additionally, a total of 25 schools have committed to Cuomo's
Code
of Conduct, nine of which have agreed to reimburse students over $3
million for the cost of revenue sharing agreements. Sallie Mae,
Citibank, EFP, and CIT have also agreed to contribute $9.5 million to
a
national fund established by Cuomo that will educate high school
students and their families about the financial aid process. Columbia
University has also agreed to pay $1.1 million into the education fund
as part of a settlement with the Attorney General's Office. On May 7,
2007, the New York State Legislature passed the Student Lending
Accountability, Transparency, and Enforcement (SLATE) Act of 2007,
which
was sponsored at the request of Cuomo and is the first piece of
legislation in the country aimed at ending the widespread conflicts of
interest the student loan industry. Governor Spitzer signed the SLATE
Act into law on May 29, 2007.

# # #

SAMPLE LETTER

June 7, 2007

Charles Elliott (C.E.) Andrews
Chief Executive Officer
Sallie Mae Corporation
12061 Bluemont Way
Reston, VA 20190

Dear Mr. Andrews:

As you may know, the Office of the New York State Attorney General is
currently conducting a nationwide investigation of the student loan
industry. In addition, the United States Senate Committee on Banking,
Housing, and Urban Affairs is presently conducting oversight of the
private student loan market and the supervision of the private loan
market by federal banking regulators. We are troubled by a number of
industry practices which have already surfaced, ranging from conflicts
of interest to kickback schemes to consumer frauds. We have now
expanded our respective examinations to include criteria used by student
loan providers to underwrite private education loans. We are
coordinating our efforts to ensure an expeditious, comprehensive, and
efficient resolution of our inquiries.

We have both learned from years of experience in the lending area that
loan criteria can have powerful public policy and legal ramifications.
Given our previously stated concerns, we believe that the criteria used
for making private educational loans should be scrutinized as carefully
and as extensively as the loan criteria used in the mortgage lending
arena. Indeed, just yesterday in the Senate Banking Committee, one
major private student lender testified that it uses data as part of its
loan underwriting criteria that may disparately impact borrowers based
upon their race.

To discharge our duties to investigate, remedy, and prevent injustice
in this arena, we require your immediate cooperation in providing us
with the requested information. Accordingly, please submit to both our
respective offices documents that reflect your institution’s recent
and, if recently, modified private education loan underwriting criteria,
including but not limited to whether your company considers the
following factors: college, college location, graduation rate, historic
default rate, race, gender, age, parental income, credit history, and
any and all other factors used or considered in underwriting
determinations. Please also provide the relative weights given to the
various factors, any and all algorithms utilized, and all software used
in underwriting student loan terms and eligibility. Please also submit
all historical data regarding the rates, terms and conditions made for
all student loans issued over the past five years as well as all loan
applications and relevant data for all loans rejected over the past five
years. In order to enhance our review of this loan data information,
please provide this information in a searchable computer format. Please
provide the underwriting criteria information no later than June 15,
2007, and the historical loan data no later that June 21, 2007.

Please coordinate the production of these documents with Benjamin
Lawsky, Deputy Counselor and Special Assistant to Attorney General
Cuomo, and Lynsey Graham, Senior Counsel, U.S. Senate Banking Committee
Chairman Chris Dodd.

We look forward to your prompt response.

Sincerely,

Christopher J. Dodd
Andrew
M. Cuomo
Chairman Attorney
General of
Committee on Banking, Housing, and Urban
Affairs the State of New York
United States Senate