The Consumer Financial Protection Bureau’s (CFPB) student loan czar announced his plan to resign in a letter Monday after CFPB acting director Mick Mulvaney folded the Office For Students and Young Consumers into the bureau’s financial education office in May.
Outgoing Student Loan Ombudsman Seth Frotman wrote an accusatory resignation letter to Mulvaney, who had reassigned Frotman’s office’s staff to other parts of the CFPB.
“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” Frotman wrote in the letter according to NPR. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
Student loans are a $1.5 trillion market in the U.S. The CFPB, aided by Frotman’s Office for Students and Young Consumers, has returned more than $750 million to “harmed student loan borrowers” since the CFPB’s inception in 2011, reported the Associated Press.
Mulvaney shifted the office’s mission from enforcement to education and information-sharing in May, reported The AP. The Department of Education had stopped sharing federal student loan oversight information with the CFPB in August 2017 after accusing the bureau of handling complaints that should have been handled by the department.
Frotman had held his position since 2016 and plans to step down at the end of the week, reported the AP.
“The damage you have done to the Bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country,” Frotman wrote in the letter to Mulvaney, according to the AP. (RELATED: Uh Oh … CFPB Suffered More Than 1,000 Data Breaches)
Congress created the CFPB and the role of student loan ombudsman under the Dodd-Frank Wall Street Reform And Consumer Protection Act that was signed in 2010.
Mulvaney is both the director of the Office of Budget and Management and acting head of the CFPB. He does not take a salary for the latter position.
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