August 29, 2018

U.S. Student Loan Ombuds Quits in Disgust

This week, Seth Frotman, the Student Loan Ombudsman for the U.S. Consumer Financial Protection Bureau resigned his post. In a letter copied to two cabinet members and several members of Congress, Frotman scorched the Acting Director, Mick Mulvaney, saying that “the Bureau has abandoned the very consumers it is tasked by Congress with protecting” and instead now serve the wishes of powerful financial companies. 

The letter was the last act of a bureaucrat who took seriously the ethical mandate of his position as the watchdog for student borrowers. In May, the Student Loan Ombudsman program was moved from the bureau's enforcement into its financial education office and lost much of its power. The future of the Student Loan Ombudsman and Frotman are unclear. (Washington Post; Frotman Letter via NPR.)

Related post: ACUS Finalizes Recommendation on Use of Ombuds in Federal Agencies; Federal Student Loan Ombuds Program Survives CFPB Reorganization.

No comments:

Post a Comment