WASHINGTON—The Education Department, in a recent letter to CFPB Director Richard Cordray, claimed the Bureau violated terms of a partnership with the department regarding the sharing of federal student loan information and announced that the pact will be terminated.
Cordray has since written to Education Secretary Betsy DeVos asking for a conversation on the points made in the letter, NAFCU reported.
As part of the Memoranda of Understanding between the Education Department and the CFPB, the Bureau was to direct all complaints to the department regarding Title IV federal student loans within 10 days of receipt, but the Education Department said that the Bureau instead handled the complaints on its own, explained NAFCU.
Kathleen Smith, acting assistant secretary for the Office of Postsecondary Education, wrote that the CFPB used the Education Department's data "to expand its jurisdiction into areas that Congress never envisioned," and that the CFPB's intervention in this area adds confusion to borrowers and servicers," NAFCU reported.
The pact will be terminated 30 days from the CFPB's receipt of the letter, which was dated Aug. 31.