December 11, 1998

Bank to Reimburse U.S. for Misconduct on Student-Loan Collection

By FRED WOODHAMS

A Louisiana bank agreed last month to pay the federal government $6.1-million for failing to collect payments on federally guaranteed student loans.

Whitney National Bank discovered in an internal investigation in 1992 that some of its employees had falsified telephone logs to make it appear as if collection calls had been made. Some employees had also back-dated collection letters to borrowers.

Federal