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CFPB Chief Says Education Department Is Blocking Student Loan Oversight
The director of the Consumer Financial Protection Bureau says the Trump administration’s Education Department is getting in the way of efforts to police the student loan industry. The revelation, in a letter obtained by NPR, comes at the same time that lawsuits allege that widespread wrongdoing by student loan companies is costing some borrowers thousands of dollars.
CFPB Director Kathy Kraninger explained the problem in an April letter responding to questions from Sen. Elizabeth Warren and other lawmakers about whether the federal regulator had “abandoned its supervision and enforcement activities” related to more than $1 trillion in student loans.
A central issue is that companies that manage student loans, known as student loan servicers, are refusing to share information that the CFPB says it needs to perform proper oversight.
“Since December 2017,” Kraninger wrote in the letter, “student loan servicers have declined to produce information requested by the Bureau for supervisory examinations” related to federal student loans.
She said servicers are not sharing the information because the Department of Education has issued guidance telling them not to do so, citing “privacy” concerns. Kraninger also said that information from student loan servicers is “necessary for supervisory examinations.”
The letter is a carefully worded response to senators’ questions. But Kraninger, a Trump administration appointee, is in essence saying that the CFPB is trying to do its job protecting student borrowers and supervising loan servicing companies, but the Education Department is getting in the way.
“It’s actually quite remarkable,” says Seth Frotman, executive director of the nonprofit Student Borrower Protection Center. “The head of the Consumer Financial Protection Bureau is telling the world that the secretary of education has put in place a series of policies that are obstructing federal law enforcement officials from standing up for the millions of Americans with student debt.”
Frotman used to be the CFPB’s student loan ombudsman but quit last summer over frustrations with the Trump administration. In a scathing resignation letter last August, he said the Trump administration was “turning its back on student borrowers” and preventing him from doing his job.
Can the Trump administration become anymore deplorable? Shhhhh!!!!!! Don’t ask that out loud; they will try to prove they can!
". . . those who claim to know the Mind of God, who will tell you what God thinks and how He will judge and condemn others—those people are the greatest of all blasphemers." Aloysius Xingu Leng Pendergast
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