S.F. Student Accuses Bank of "Double-Dipping" Late Fees
It's bad enough having to pay student loan late fees -- but imagine having to pay them twice. That's just what a Bay Area student says happened to her when the bank charged her two times for student-loan late fees.
Tina Ubaldi is suing Sallie Mae and its affiliates, claiming unfair business practices and unjust enrichment over the $22,796 loan she took out to attend the California Culinary Academy in San Francisco. Sallie Mae charges daily interest on student loans, in addition to a late charge if payments are not received. Ubaldi says the financial institution is double-dipping.
"In addition to the daily interest on the outstanding principal that Sallie Mae earns every day ... if a payment is not received within the 15-day period, Sallie Mae may assess a late charge of the greater of $5 or 5 percent of the payment amount not received," according to the complaint filed in San Francisco this week.
However, Sallie Mae claims the second set of charges originate from its lender bank, Stillwater National Bank and Trust Co. Sallie Mae says this Stillwater, Okla., bank is allowed, under Oklahoma law, to make the late charges on Ubaldi's loan.
According to the National Bank Act, loans that originate from national banks are allowed to include late charges and interest at the rate governed by state law.
But Ubaldi claims Sallie Mae is breaking California's business codes.
"Plaintiff alleges that as a result of assessing a $5 or 5 percent fee for nonpayment and also continuing to charge the borrower daily interest for use of the funds, the borrower pays Sallie Mae twice -- in two different ways -- for being late on a single loan payment," which is violating California's business and professions codes.
Ubaldi is paving a road for California students involved in private
loans; she already spotted one bank with a loophole which found a way to charge her unfairly.
Sounds like this is a battle for the Occupy Movement.