WASHINGTON — Claiming the Bureau of Consumer Financial Protection is no longer acting to protect consumers and that the public is being endangered due to a lack of oversight on student loans,
the Consumer Federation of America said the resignation of a BCFP official is a troubling sign.
Seth Frotman, the BCFP’s Student Loan Ombudsman, resigned following a decision by Acting BCFP Director Mick Mulvaney to close the agency’s Office for Students and Young Consumers, which was created to protect student borrowers and young adults from abusive financial practices. While Frotman has been with the Office for Students and Young Consumers, more than $750 million has been returned to student borrowers as the result of various settlements.
The CFA said Frotman’s departure is a troubling sign for student borrowers.
“Assistant Director Frotman has been a champion of the 44 million Americans who owe student debt. His work at the CFPB has curbed industry abuse and reclaimed hundreds of millions of dollars for student borrowers,” said Christopher Peterson, director of financial services at the Consumer Federation of America, in a statement. “When student loan borrowers mail their payment checks in each month, they should bear in mind that the Trump administration is turning its back on ensuring their rights are protected. The truth is that the President’s consumer protection agenda is a dumpster fire. The administration has seized control of an independent consumer watchdog and is strangling one of the only agencies in Washington dedicated to looking out for the rights of ordinary Americans.”
In its statement the CFA said more than 11 million Americans are past due or in default on a student loan, despite the availability of income-driven repayment options for the vast majority of borrowers.