08.27.18

Ranking Member Scott Reacts to Resignation of CFPB’s Student Loan Watchdog

WASHINGTON – Ranking Member Bobby Scott (VA-03) issued the following statement after Seth Frotman, Student Loan Ombudsman at the Consumer Financial Protection Bureau, announced his resignation in a letter to Acting Director Mick Mulvaney. In the letter, Frotman says the Bureau has “abandoned the very consumers it is tasked by Congress with protecting.” 

“Seth Frotman’s resignation from the Consumer Financial Protection Bureau is further evidence that the Bureau’s current leadership is failing to do its job on behalf of America’s 44 million student loan borrowers. Mr. Frotman’s assessment that the Bureau has lost its independence and is now a political arm of the administration should be taken seriously. It not only reflects his personal experience, but it is also supported by the series of recent actions taken by the Bureau to weaken protections for students and their families.

“While the Trump administration’s hostility toward consumer protections is well-documented, Mr. Frotman’s letter includes at least one new disturbing allegation that warrants immediate investigation. The revelation that last year the Bureau concealed evidence showing the nation’s largest banks were ripping off students through legally dubious account fees is a serious violation of its duty to the American people.

“An independent, effective Consumer Financial Protection Bureau is critical to the integrity of our higher education system. Since its inception, the Bureau has processed more than 60,000 student loan complaints and returned more than $750 million to defrauded student borrowers. The absence of meaningful consumer protections will affect thousands of students and families for years to come.

“I am calling for congressional hearings to examine the Bureau’s sudden withdrawal from its necessary role in protecting students and student loan borrowers from predatory companies.”