FOR IMMEDIATE RELEASE
Aug. 27, 2018
Carter Dougherty, email@example.com, (202) 251-6700
AFR Statement on Resignation of Student Loan Ombudsman
Seth Frotman has announced his resignation as the CFPB’s Student Loan Ombudsman, and described the current direction of the agency with Mick Mulvaney at the helm as betraying students and families, and sacrificing the financial futures of millions of Americans.
“The CFPB was doing exactly the job it was set up to for student loan borrowers and all users of financial services: stopping ripoffs by lenders, servicers, and debt collectors,” said Linda Jun, senior policy counsel at AFR. “This includes, for example, returning $750 million to harmed student loan borrowers, and exposing widespread problems in implementation of income-based repayment plans.”
Frotman’s letter of resignation described a terrible change under Mulvaney: “the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
With regard to student lending, just as in other areas, instead of holding harmful actors accountable, Mulvaney is suppressing exposure of wrongdoing, and undercutting enforcement of the law. AFR thanks Mr. Frotman, and his colleagues, for their good work, and deplores these changes.
Kathy Kraninger, who has been nominated by the Trump Administration as the next CFPB Director, has said that she approves of the direction Mulvaney has taken. If Senators vote to confirm her they will be voting for a continuation of these betrayals. There is a great deal at stake for all of us in having a serious effective watchdog taking on abuses in student lending. Recent polling by AFR and the Center for Responsible Lending has highlighted that the American public increasingly sees the burden of student debt as a crisis for the country.