08-27-2018, 01:22 PM
https://www.npr.org/2018/08/27/642199524/student-loan-watchdog-quits-blames-trump-administration
Seth Frotman, the student loan ombudsman at the Consumer Financial Protection Bureau, had spent 7 years working to protect military families and students from predatory lending. He resigned recently, citing the agencies efforts to reduce protections for consumers and promote the interest of financial institutes.
Frotman remarks at the bureau once served to demand reform and hold student loan companies accountable, returning over $750m to harmed borrowers, but that the bureau now has adopted practices that have begun to harm consumers.
His main charges are that under Mick Mulvaney (who called the bureau a "joke... in a sick, sad kind of way" before he took office), the bureau has 1) undercut enforcement of existing law, 2)undermined the bureau's independence, and 3) shielded bad actors from scrutiny.
This year the bureau moved from investigating abuses to sharing data on lending, something the DOE did too with regards to institutes of higher learning that had high student debt but low graduate employment achievement. The DOE has argued that lenders should be protected from efforts to regulate them as student loan debt in this country continues to grow, threatening the financial security of whole generations.
Seth Frotman, the student loan ombudsman at the Consumer Financial Protection Bureau, had spent 7 years working to protect military families and students from predatory lending. He resigned recently, citing the agencies efforts to reduce protections for consumers and promote the interest of financial institutes.
Frotman remarks at the bureau once served to demand reform and hold student loan companies accountable, returning over $750m to harmed borrowers, but that the bureau now has adopted practices that have begun to harm consumers.
His main charges are that under Mick Mulvaney (who called the bureau a "joke... in a sick, sad kind of way" before he took office), the bureau has 1) undercut enforcement of existing law, 2)undermined the bureau's independence, and 3) shielded bad actors from scrutiny.
Quote:Over the past year, the Trump administration has increasingly sidelined the CFPB's student loan office. Last August, the U.S. Department of Education announced it would stop sharing information with the bureau about the department's oversight of federal student loans, calling the CFPB "overreaching and unaccountable" and arguing that the bureau's actions were confusing borrowers and loan servicers alike. Of the move, Frotman writes, "the Bureau's current leadership folded to political pressure ... and failed borrowers who depend on independent oversight to halt bad practices."
This year the bureau moved from investigating abuses to sharing data on lending, something the DOE did too with regards to institutes of higher learning that had high student debt but low graduate employment achievement. The DOE has argued that lenders should be protected from efforts to regulate them as student loan debt in this country continues to grow, threatening the financial security of whole generations.
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