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The resignation of Student Loan Watchdogs threatens borrowers




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Mick Mulvaney, Deputy Director of the Consumer Protection Bureau for Finance AP Photo / Jacquelyn Martin

The 44 million Americans who owe $ 1

.50 to the Confederation Billy's student loans have suddenly become more vulnerable. "Yesterday, Seth Frotman, the Consumer Credit Ombudsman, resigned.

In a devastating letter to CFPB Director Mick Mulvaney, Frotman said Mulvaney & # 39; s leadership" led the way. " The office has given up the consumers who commissioned it from the congress. "Frotman will give up his job next week and no replacement will be named.

The CFPB was created by the Obama administration in the wake of the financial crisis of 2008. Frotman has held the Ombudsman job since 2011. He has the return of $ 750 million His office was in suing for-profit colleges such as Corinthian colleges, and it's in a perpetual lawsuit against Navient, the nation's largest student loan-serving corporation.The lawsuit alleges that Navient borrowers out of their rights to lower payments

Frotman's letter supports complaints from consumer advocates who raise the alarm over the failure of the Trump administration to protect borrowers In May, Mulvaney closed Frotman's office and moved student lending to the Consumer Information Division, which resulted in the death penalty his ability to become an executor was undermined Last year, the Ministry of Education ended two CFPB information exchange agreements to pursue student loan complaints and rejected the CFPB for overriding its jurisdiction. And last month, Education Minister Betsy DeVos proposed a more restrictive borrower defense rule for debtors who were misled or cheated. These statements followed earlier this year, claiming that only the federal government, rather than the state regulators, had the power to oversee federal student loans.

Frotman's letter also describes how the CFPB prevented the publication of a report from his office. Large banks levied excessive fees on student debtors.

"On each round, your political representatives silenced the warnings of those of us charged with standing up for military personnel and students," wrote Frotman in his letter

Mulvaney became head of the Office of Management and Budget is appointed by Kathy Kraninger, a middle-level OMB bureaucrat who has no experience in consumer protection. Before joining the Trump administration Mulvaney was a Republican from South Carolina attacking the office he now heads. He called the CFPB "a joke … in a sick, sad way" because he was not accountable to Congress.

Shortly after the news of Frotmans departure was broken yesterday, California Attorney General Xavier Becerra tweeted "" This resignation further points out that Mick Mulvaney and Betsy DeVos are pure delight in predatory profit-oriented colleges, unscrupulous lenders and borrowers and abusive debt collectors work. Despite their task, we will continue to fight for our students. "

Becerra has challenged the Ministry of Education on several fronts and sued to postpone the rules on paid work, disclose professional programs that do not adequately prepare students for work, has also sued Minister DeVos to improve the forgiveness of loans for students, deceived by Corinthian colleges and reached a $ 67 million agreement with a private firm that had granted private loans to Corinthian students.

Consumer advocates also express concern about Frotman's departure Debbie Cochrane, vice president of the nonprofit Institute for Higher Education Access and Success, CNBC said that Frotman's resignation was "a devastating turn of events."

The CFPB refused to comment on Frotman's departure. "We hope that all of our divisional employees find fulfillment in other matters and we thank them for their return Use, "said a CFPB Spokesman for the Wall Street Journal

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Mick Mulvaney, Deputy Director of the Tax Bureau for Consumer Protection. AP Photo / Jacquelyn Martin

The 44 million Americans who owe $ 1.5 trillion to the federal government Student loans are suddenly more vulnerable. Yesterday, Seth Frotman, the student loan ombudsman at the Tax Bureau for Consumer Protection, stepped down

In a devastating letter to CFPB director Mick Mulvaney, Frotman said that under Mulvaney's leadership, "the office has given up exactly the consumers who own it Congress has commissioned protection. "Frotman will leave work next week and no replacement has been named.

The CFPB was created by the Obama administration in the wake of the 2008 financial crisis. Frotman has held the Ombudsman job since 2011. He has overseen the return of $ 750 million to hurt borrowers. His office has been instrumental in lawsuits against for-profit colleges such as the Corinthian Colleges and initiated a continuing lawsuit against Navient, the nation's largest student loan service company. The lawsuit alleges that Navient cheated borrowers from their rights to lower payments.

Frotman's letter supports complaints from consumer advocates who have raised the alarm about the Trump government's failure to protect borrowers. In May, Mulvaney closed Frotman's office and moved student lending to the Consumer Information Division, undermining his ability to become an enforcer. Also last year, the Ministry of Education terminated two CFPB information exchange agreements to pursue student loan complaints and rejected the CFPB for overriding its jurisdiction. And last month, Education Minister Betsy DeVos proposed a more restrictive borrower defense rule for debtors who were misled or cheated. These statements followed earlier this year, claiming that only the federal government, rather than the state regulators, had the power to oversee federal student loans.

Frotman's letter also describes how the CFPB prevented the publication of a report from his office. Large banks levied excessive fees on student debtors.

"On each round, your political representatives have silenced the warnings of those of us charged with standing up for military personnel and students," Frotman wrote in his letter

becoming the head of the Office of Management and Budget Appointed is replaced by Kathy Kraninger, a middle-level OMB bureaucrat who has no experience in consumer protection. Before joining the Trump administration Mulvaney was a Republican from South Carolina attacking the office he now heads. He called the CFPB "a joke … in a sick, sad way" because he was not accountable to Congress.

Shortly after the news of Frotmans departure was broken yesterday, California Attorney General Xavier Becerra tweeted "" This resignation further points out that Mick Mulvaney and Betsy DeVos are pure delight in predatory profit-oriented colleges, unscrupulous lenders and borrowers and abusive debt collectors work. Despite their task, we will continue to fight for our students. "

Becerra has challenged the Ministry of Education on several fronts and sued to postpone the rules on paid work, disclose professional programs that do not adequately prepare students for work, has also sued Minister DeVos to improve the forgiveness of loans for students, deceived by Corinthian colleges and reached a $ 67 million agreement with a private firm that had granted private loans to Corinthian students.

Consumer advocates also express concern about Frotman's departure Debbie Cochrane, vice president of the nonprofit Institute for Higher Education Access and Success, CNBC said that Frotman's resignation was "a devastating turn of events."

The CFPB refused to comment on Frotman's departure. "We hope that all of our divisional employees find fulfillment in other matters and we thank them for their return Use, "said a CFPB Spokesman of Wall Street Journal .


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