The man in charge of protecting America’s student loan borrowers just resigned with brutal open letter

- 12.17

The Trump administration’s steady dismantling of the Consumer Financial Protection Bureau, the government agency started by Senator Elizabeth Warren during the Obama era, has led to the resignation of the nation’s top student loan watchdog.

Seth Frotman, the student loan ombudsman at the Consumer Financial Protection Bureau who was tasked with protecting people borrowing to fund their college educations, stepped down today after sending an incendiary letter to CFPB acting director Mike Mulvaney, according to NPR.

In his letter, Frotman said that the administration had undermined the agency and its mission to shield students from predatory lenders.

“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” Frotman’s letter accused. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”

Accusing the Trump regime with turning “its back on young people and their financial futures,” Frotman’s resignation letter demonstrates the unwillingness of this administration to protect student borrowers from the sleazy practices of the $1.5 trillion student loan industry.

According to NPR, in his three years as ombudsman and assistant director, “Frotman oversaw the CFPB’s Office for Students and Young Consumers and reviewed thousands of complaints from student borrowers about the questionable practices of private lenders, loan servicers and debt collectors.”

“Since 2011, the CFPB has handled more than 60,000 student loan complaints and, through its investigations and enforcement actions, returned more than $750 million to aggrieved borrowers. Frotman’s office was central to those efforts. It also played a role in lawsuits against for-profit giants ITT Tech and Corinthian Colleges and the student loan company Navient.”

Since the Trump administration has taken over the reins of power, however, the CFPB’s work has been consistently sabotaged, beginning with last August’s decision by Betsy DeVos to have the Department of Education stop sharing information with the bureau about the department’s oversight of federal student loans.

DeVos claimed that the CFPB was “overreaching and unaccountable” and argued that the bureau’s oversight was confusing both borrowers and loan servicers. Frotman responded that “the Bureau’s current leadership folded to political pressure … and failed borrowers who depend on independent oversight to halt bad practices.”

The final straw for Frotman was the announcement by acting Director Mulvaney in May that the Office for Students and Young Consumers would be consolidated with the bureau’s financial education office, initiating a mission shift from investigation to information-sharing.

In his resignation, Frotman also accuses the CFPB’s leadership of suppressing new evidence that some of the nation’s largest banks were “saddling [students] with legally dubious account fees,” according to a report that his office had meticulously prepared.

Frotman’s resignation letter confirms what consumer advocates have feared about the Trump regime’s reversal of the mission of the CFPB from protecting consumers from rapacious financial institutions to protecting the profits of those institutions.

Asked for a response to Frotman’s resignation letter, the CFPB issued a statement saying:

“The Bureau does not comment on specific personnel matters. We hope that all of our departing employees find fulfillment in other pursuits and we thank them for their service.”

Still, the mystery remains, how do so many people still believe that the Trump administration cares about anything except maximizing corporate profits to the detriment of the average citizen?

Follow Vinnie Longobardo on Twitter.

The post The man in charge of protecting America’s student loan borrowers just resigned with brutal open letter appeared first on Washington Press.

 

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