CIT puts three on leave amid student-loan probe
CIT Group Inc., the largest independent U.S. commercial-finance company, placed three executives of its student-loan business on administrative leave amid a probe into conflicts of interest.
Mike Shaut, chief executive of Student Loan Xpress, Fabrizio Balestri, the unit’s president, and Vice Chairman Robert deRose were put on leave while the company reviews its lending practices, New York-based CIT said.
Randall Chesler, president of CIT’s consumer-finance division, will oversee Student Loan Xpress on an interim basis.
New York Atty. Gen. Andrew Cuomo has subpoenaed CIT and New York’s Columbia University in a probe of links between lenders and college officials in the $85-billion-student-loan industry. Cuomo is probing officials at Columbia, the University of Texas at Austin and USC who owned shares of Student Loan Xpress, a unit of Education Lending Group.
The business, which CIT acquired in 2005, was recommended by the schools as a “preferred lender.”
CIT shares fell 16 cents to $53.94.
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