Is it legal for a Bank to move my account to a different bank without my permission?

After my graduation, I consolidated my Student Loans with ISM Loans. Today, I tried to accesss my account online to make a payment but couldn't access my account. I called ISM. They told me that my account was moved to an X bank and that my payments should be sent to X bank.


Is this legal?
Is it legal for a Bank to move my account to a different bank without my permission?
It's common practice among banks, even loan originators and mortgage loans.





Banks typically sell your debt to another financial institution, so you now need to pay to that new institution.





It's perfectly legal. There's a huge market for debt buying and selling.
Reply:It's very legal. Some of those banks have an investor lined up to buy the loans before you even close on the loan...in some cases as I found out the banks have to make sure they can be able to sell your loan before they grant it to you. It should have said so on your application that ISM has the right to sell your loan whenever.





You should have received letters in the mail telling you of this change from both banks. Funny thing with me is my loan was sold to my credit card company so one day I logged on and saw my loan information on there before I even saw the letters!!! I called my original lenders and they told me to continue making payment to them until I receive a letter stating that I should change lenders. Thats strange that ISM told you to switch lenders even though you have received no communication from X bank. I don't think you would be liable for any late fees since there was a communication breakdown somewhere.
Reply:Yes it is. You should have received a notice in the mail stating that the loan had been sold to the other bank.





Before you do anything, call the other bank to verify the existence of the account.
Reply:Yes it is legal, but they should have told you before making the switch. Banks are owned by the federal government which means, they can do as they wish. Total power etc. etc. It is legal, unfortunatly, so dont fret! :)
Reply:yes since banks can change the servicing rights on loans at any time