AP reports: The government’s top official overseeing the $1.5 trillion student loan market resigned in protest on Monday, citing what he says is the White House’s open hostility toward protecting the nation’s millions of student loan borrowers.
“Seth Frotman will be stepping down as student loan ombudsman at the end of the week, according to his resignation letter, which was obtained by The Associated Press. He held that position since 2016, but has been with Consumer Financial Protection Bureau since its inception in 2011.
“Frotman is the latest high-level departure from the CFPB since Mick Mulvaney, President Donald Trump’s budget director, took over in late November. But Frotman’s departure is especially noteworthy, since his non-partisan office is one of the few parts of the U.S. government that was tasked with handling student loan issues. …
“’You have used the bureau to serve the wishes of the most powerful financial companies in America,’ Frotman wrote, addressing his letter to Mulvaney. ‘The damage you have done to the bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country.'”
REMINGTON GREGG, rgregg at citizen.org, @ragregg
Counsel for civil justice and consumer rights at Public Citizen, Gregg said today: “Under the former director of the Consumer Financial Protection Bureau (CFPB), the agency protected consumers against many unscrupulous practices and returned $12 billion to more than 20 million people. In contrast, the current political leadership of the Consumer Bureau is methodically rolling back any regulation or guidance it can put their hands on, stopping dedicated career civil servants from robustly enforcing consumer laws, and giving scammers a Get Out of Jail Free card. In just eight months of temporary director Mick Mulvaney’s tenure, the Consumer Bureau is unapologetically doing the bidding of predatory lenders and fraudulent colleges rather than protect servicemembers, students, and seniors.
“Sadly, the Trump administration is rolling back regulations and stopping enforcement actions against corporate wrongdoers government-wide — from regulations protecting seniors in nursing homes from abuse and neglect to making it harder for students who are defrauded by predatory colleges to get financial relief.
“The current nominee to be the permanent CFPB director, Kathy Kraninger, has *no* experience in consumer issues. Zero. Seth Frotman’s resignation letter serves as a clarion call to all of us. If this administration and Congress continue to abdicate their responsibilities to protect the most vulnerable in our society, all of us — consumers, activists, and advocates — must do so.”
