Seth Frotman, an assistant director and student loan ombudsman for the Consumer Financial Protection Bureau (CFPB), had some harsh words for acting CFPB Director Mick Mulvaney in his resignation letter.
Frotman has spent seven years in the CFPB’s student lending office, which Mulvaney stripped of most of its functions last May. As part of a restructuring, the office was folded into the agency’s financial education unit. That means that instead of examining student loan complaints that could be referred to the agency’s enforcement division, Frotman and his staff had been working on pamphlets and web content about student loans.
In his resignation letter, according to American Banker, Frotman stated that Mulvaney had stopped the publication of a report last year that revealed large banks were taking advantage of students by charging them suspicious fees.
The “current leadership of the Bureau has abandoned its duty to fairly and robustly enforce the law,” wrote Frotman, whose resignation goes into effect Sept. 1.
“The Bureau’s new political leadership has repeatedly undercut and undermined career CFPB staff, working to secure relief for consumers,” Frotman continued. “When the education department unilaterally shut the door to routine CFPB oversight of the largest student loan companies, the Bureau’s current leadership folded to political pressure.”
Under former CFPB Director Richard Cordray, the agency’s student loan office returned more than $750 million to student loan borrowers, but Frotman wrote that “the current leadership of the Bureau has made its priorities clear — it will protect the misguided goals of the Trump Administration to the detriment of student loan borrowers. Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
The letter was sent to 10 lawmakers, including members of both the House Financial Services Committee and Senate Banking Committee, Treasury Secretary Steven Mnuchin and Education Secretary Betsy DeVos.