Chairs Also Request Documents from Education Department, Loan Servicers
WASHINGTON – Today, Financial Services Committee Chairwoman Maxine Waters (D-CA), Education and Labor Committee Chairman Bobby Scott (D-VA), and Oversight and Reform Committee Chairman Elijah Cummings (D-MD), sent a letter to Consumer Financial Protection Bureau Director Kathleen Kraninger requesting information and records concerning the CFPB’s efforts to protect consumers from unlawful student loan servicing practices.
In the letter, the Chairs raise concerns that “…the Consumer Bureau has taken actions that weaken its ability to fulfill its mission to protect student loan borrowers,” and that the agency is “…providing potentially harmful and conflicting advice to student loan borrowers.” The Chairs request records from the Consumer Bureau by no later than September 9, 2019.
Former Student Loan Ombudsman Seth Frotman asserted in his August 2018 resignation letter that CFPB leadership “has abandoned the very consumers it is tasked by Congress with protecting.” The position of Student Loan Ombudsman has been vacant since Frotman resigned in August 2018.
The Chairs also sent a letter to Betsy DeVos expressing deep concern over the Education Department’s failure to protect students and families from student loan companies. The letter addresses recent reports that the Department is shielding student loan servicing companies from state law enforcement and undermining the CFPB’s oversight of these companies. In March 2019, an independent watchdog found that the Department failed to establish policies to properly conduct oversight of student loan servicing companies.
“As Chairs of Committees with oversight responsibilities over the student loan industry, we are very concerned by reports that under your leadership, the Department of Education has failed to adequately oversee student loan servicers,” the Chairs wrote. “Reports indicate that improper practices by these servicers—including inaccurate determination of monthly payments, forbearance steering, and other practices—directly impact millions of Americans and have ripple effects on their families, communities, and the economy as a whole.”
In addition, the Chairs sent letters today to federally contracted loan servicers seeking information about their operations, including any strategies or policies that push students into more expensive repayment options.
The full text of the letter to the CFPB is available here.
The full text of the letter to the Education Department is available here.
The full text of the letter to Navient is available here.
The full text of the letter to Nelnet is available here.
The full text of the letter to Pennsylvania Higher Education Assistance Agency is available here.