NEW YORK–New York Attorney General Eric T. Schneiderman has announced a $2.25-million settlement with Franklin, Tenn.-based Southeast Financial Credit Union related to student loans financed by the credit union in conjunction with The College Network.
In 2015 the Attorney General filed suit against The College Network alleging it had induced “prospective nursing students to pay thousands of dollars for ineffective study guides through false and deceptive business practices – including preying on as many as 2,000 New York consumers who sought to obtain associate degrees in nursing.”
“The settlement with Southeast Financial Credit Union secures $2.25 million in refunds for duped New Yorkers and requires the credit union to clean up any students’ negatively-affected credit ratings,” Schneiderman said in a statement.
Schneiderman said The College Network has used misleading advertising and high-pressure sales tactics, and also created the false impression that it was offering online nursing degrees and that it was affiliated with Excelsior College, an accredited institution based in Albany that offers such degrees.
“The lawsuit also charges that, through an agreement with The College Network, Southeast Financial Credit Union provided financing to many of The College Network’s customers,” Schneiderman said. “As required by federal law, Southeast Financial Credit Union’s loan agreements provided that the credit union, as the holder of consumer credit contracts, is subject to all claims and defenses that consumers may have against The College Network.”
In addition to paying $2.25 million, which will be distributed to eligible consumers who financed their purchase from The College Network through the credit union, the settlement requires Southeast Financial Credit Union to clean up the credit of any New York consumers who received negative marks on their credit report from the credit union.
The A.G. said the settlement resolves the specific lawsuit against Southeast Financial Credit Union. A lawsuit that is pending in Albany County Supreme Court in New York will continue against the remaining parties, the statement said.
The $378-million Southeast Financial CU has approximately 41,000 members.