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An empty chair Photo by rashid khreiss on Unsplash

Joint Statement: Nation’s Top Student Loan Watchdog Post Remains Vacant 150 Days After CFPB Director Promised to “Quickly” Fill the Role

Tomorrow marks one hundred fifty days since Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger committed to quickly filling the nation’s top student loan watchdog position—a role that has been vacant for almost a year. As student debt nears $1.6 trillion and predatory practices plague the market, the Student Borrower Protection Center (SBPC) and Americans for Financial Reform Education Fund (AFREF) are releasing a roundup of failures by the current CFPB Director to stand up for student loan borrowers.

Sticky PostA Toys R Us store in Dublin, California, following the toy retailer’s bankruptcy, July 23, 2018. Smith Collection/Getty Images

In the News: The Workers Bearing the Brunt of Retail’s Struggles? Primarily Women and People of Color. (Vox)

Vox article quotes Heather Slavkin-Corzo, senior fellow at Americans for Financial Reform and director of capital markets policy for the AFL-CIO: “When a private equity firm steps in, it’s a classic case of ‘Heads I win, tails you lose’ … They have a real short-term focus on extracting as much cash as possible, as quickly as possible.”

In the News: Private Equity’s Role in Retail has Decimated 1.3 Million Jobs, Study Says (Washington Post)

In practice, that meant they often sold off real estate holdings, cut workers’ pay and benefits, and did away with jobs to turn a quick profit for investors, according to Heather Slavkin Corzo, a senior fellow at Americans for Financial Reform and the director of capital markets policy for the labor union AFL-CIO. “When a private equity firm steps in, it’s a classic case of ‘heads I win, tails you lose,” Corzo said. “They have a real short-term focus on extracting as much cash as possible, as quickly as possible.”

In the News: Chase For Yield Has Fueled Private Equity With Significant Consequences For Americans (Forbes)

Lisa Donner, Executive Director of Americans for Financial Reform, a nonpartisan, not-for-profit consumer advocacy organization strongly supports the bill. “These powerful interests have rigged the rules to enable financial engineering that lets a tiny handful of people extract vast wealth at everyone else’s expense. It is time to change the laws to protect workers, communities, and pensions.”

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Letters to Regulators: AFR Education Fund letter to the SEC opposing cross-border rule proposal

On July 23, 2019, AFR Education Fund submitted a letter to the U.S. Securities and Exchange Commission (SEC) opposing a proposal that would create exemptions that would permit U.S. banks – and international banks active in the U.S. market – to do large-scale derivatives dealing in the U.S. without being designated as derivatives dealers under Dodd-Frank Act rules.

In the News: Why is Trump’s Consumer Protection Agency Helping to Promote H&R Block’s Credit Card? (LA Times)

“Financial education isn’t going to stop a company from misapplying your mortgage payment or the wrongful repossession of a car,” observes Linda Jun, a senior policy counsel at Americans for Financial Reform. “The financial crisis wasn’t about people suddenly forgetting how to save. That was a very minor aspect of what happened. There were these bad actors that preyed on people with deceptive fees and unfair practices and discrimination. The point of having a financial regulator that protects consumers is to bring these shady behaviors to an end.”

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In the News: Eugene Scalia, Trump’s Pick to Head the Labor Department, Scares Worker Advocates to Death (CBS News)

“He was at the center of the industry effort to undo Dodd-Frank in the back rooms, and in terms of intimidating regulators and overturning important parts of it, he had a lot of success,” recalled Marcus Stanley, policy director of Americans for Financial Reform, a group that supports the law.
“Most of the rules that were costing industry a lot of money, he was the lead on trying to overturn them,” Stanley added.