Sallie Mae 2014 Annual Report Download - page 137

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
18. Defined Contribution Plans
We participate in a defined contribution plan which is intended to qualify under section 401(k) of the Internal Revenue
Code. The Sallie Mae 401(k) Savings Plan covers substantially all employees. After six months of service, effective January
2013, and after one year of service prior to that time, up to 3 percent of contributions are matched 100 percent with the next 2
percent matched at 50 percent for eligible employees. After one month of service, eligible employees receive a 1 percent core
employer contribution. For the years ended December 31, 2014, 2013 and 2012, we contributed $3,084, $2,779 and $2,317,
respectively, to this plan.
19. Commitments, Contingencies and Guarantees
Regulatory Matters
At the time of this filing, the Bank remains subject to the 2014 FDIC Order. Specifically, on May 13, 2014, the Bank
reached settlements with the FDIC and the DOJ regarding disclosures and assessments of certain late fees, as well as
compliance with the SCRA. The DOJ Order was approved by the U.S. District Court for the District of Delaware on September
29, 2014. Under the FDIC’s 2014 Order, the Bank agreed to pay $3.3 million in fines and oversee the refund of up to $30
million in late fees assessed on loans owned or originated by the Bank since its inception in November 2005.
Under the terms of the Separation and Distribution Agreement between the Company and Navient, Navient is responsible
for funding all liabilities under the regulatory orders, other than fines directly levied against the Bank in connection with these
matters. Under the DOJ Order, Navient is solely responsible for reimbursing SCRA benefits and related compensation on
behalf of both its subsidiary, Navient Solutions, Inc., and the Bank.
In May 2014, the Bank received a Civil Investigative Demand from the CFPB in the Bank’s capacity as a former affiliate
of Navient as part of the CFPB’s separate investigation relating to fees and policies of pre-Spin-Off SLM during the period
prior to the Spin-Off of Navient. We are cooperating fully with the CFPB but are not in a position at this time to predict the
duration or outcome of the investigation. Given the timeframe covered by this demand, Navient would be responsible for all
costs, expenses, losses or remediation likely to arise from this investigation.
Contingencies
In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and
threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and
proceedings may be based on alleged violations of consumer protection, securities, employment and other laws. In certain of
these actions and proceedings, claims for substantial monetary damage may be asserted against us and our subsidiaries.
We and our subsidiaries and affiliates are subject to various claims, lawsuits and other actions that arise in the ordinary
course of business. In addition, it is common for the Company, our subsidiaries and affiliates to receive information and
document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies.
These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which
we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with
these bodies and be responsive to any such requests.
In view of the inherent difficulty of predicting the outcome of litigation, regulatory and investigative actions, we cannot
predict what the eventual outcome of the pending matters will be, what the timing or the ultimate resolution of these matters
will be, or what the eventual loss, fines or penalties, if any, related to each pending matter may be.
We are required to establish reserves for litigation and regulatory matters where those matters present loss contingencies
that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish
reserves.
Based on current knowledge, management does not believe there are loss contingencies, if any, arising from pending
investigations, litigation or regulatory matters that could have a material adverse effect on our consolidated financial position,
liquidity, results of operations or cash flows.
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