Citing concerns that the Consumer Financial Protection Bureau is no longer concerned with protecting consumers, the Bureau’s Student Loan Ombudsman has offered his resignation effective Sept. 1, 2018. In a letterto Acting Director Mick Mulvaney, Seth Frotman accused current Bureau leadership of hurting American families, particularly student loan borrowers.
For its first seven years, the CFPB served as a lifeline for consumers—cutting through red tape, demanding systematic reforms when borrowers were harmed, and serving as the primary financial regulator tasked with holding student loan companies accountable when they break the law, said the letter. To that end, more than $750 million was returned to borrowers who were harmed and predatory practices were halted.
Under Mulvaney’s leadership, charged Frotman, the Bureau has abandoned these consumers and now serves "the wishes of the most powerful financial companies in America." Frotman points to the following "sweeping changes" that the CFPB has made in the last few months, including: undercutting enforcement of the law; undermining the Bureau’s independence; and shielding bad actors from scrutiny.
While pledging to continue fighting on behalf of student loan borrowers trapped in a broken system, the letter criticizes the damage that has been done to the CFPB and the "financial futures of millions of Americans in communities across the country."
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