The Consumer Financial Protection Bureau, perhaps because it is newer than other regulatory agencies, has provided a stage for some of the most dramatic battles of the Trump administration.
On Monday, CFPB Student Loan Ombudsman Seth Frotman’s resignation letter set yet another scene: In three pages, Frotman listed the ways that the bureau has “abandoned the very consumers it is tasked by Congress with protecting” in favor of serving “the wishes of the most powerful financial companies in America.”
Per Frotman, “the current leadership”— and specifically, its political appointees — has done the following, with some of our contextual reading interjected:
“abandoned its duty to fairly and robustly enforce the law”
“repeatedly undercut and undermined career CFPB staff working to secure relief for consumers … including those harmed by the company that dominates this market.”
A huge chunk of the complaints Frotman’s office received concerned Navient, the largest student loan servicer in the country. Mulvaney eventually shut CFPB’s public comment portal down, saying “I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government.”
“folded to political pressure” when the Department of Education “unilaterally shut the door to routine CFPB oversight of the largest student loan companies,” therefore failing “borrowers who depend on independent oversight”
READ: DeVos notifies CFPB of intent to terminate information-sharing on federal student loans
“blocked efforts to call attention to the ways in which the actions of this administration will hurt families ripped off by predatory for-profit schools”
“blocked attempts to alert the Department of Education to the far-reaching harm borrowers will face due to the Department’s unprecedented and illegal attempts to preempt state consumer laws and shield student loan companies from accountability for widespread abuses”
READ: The memo itself
“silenced warnings by those of us tasked with standing up for servicemembers and students”
done “the bare minimum for [consumers] while simultaneously going above and beyond to protect the interests of the biggest financial companies in America”
“We had a hierarchy in my office in Congress,” Mulvaney once told a roomful of bankers after a few months as acting CFPB director. “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”
“suppressed the publication of a report prepared by Bureau staff [on ‘new evidence… showing that the nation’s largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees’]”
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The White House has nominated the virtually unknown Mulvaney underling Kathy Kraninger to run the CFPB. She was voted out of the Senate Banking Committee on a party-line vote last week, and will likely be confirmed on the same partisan line in the Senate.