The Hill, August 27, 2018: Top CFPB official resigns, accuses administration of turning its back on students’ financial futures
The student loan ombudsman at the Consumer Financial Protection Bureau (CFPB) has resigned, saying the agency’s leaders have chosen to serve powerful financial companies instead of consumers, NPR News reported on Monday.
Seth Frotman reportedly said in an official resignation letter addressed to Director Dick Mulvaney, that leadership at the CFPB has “turned its back on young people and their financial futures.”
“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” his letter read, according to NPR. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
The CFPB has reviewed more than 60,000 student loan complaints and returned more than $750 million to aggrieved borrowers since 2011, according to NPR. But the office has changed under the Trump administration. For example, in August 2017 the Department of Education announced it would no longer share info with the CFPB regarding its review of federal student loans, NPR reported.
In December 2017, the Department of Education announced new rules for providing aid to students who said they were defrauded by their colleges. The new system would limit some student loan refunds by tying it to their income.
“The Bureau’s current leadership folded to political pressure… and failed borrowers who depend on independent oversight to halt bad practices,” Frotman wrote in his letter, according to NPR.
The New York Times reported in May that the Education Department had largely dismantled a team charged with investigating abuses by for-profit colleges.
