Donald Trump has surrounded himself with a wide variety of swamp creatures in his administration. When the stench of these creatures reeks too much, decent public servants can no longer bear it. The last one to quit left behind an important message.
Seth Frotman was the Student Loan Ombudsman at the (CFPB). His job was to protect students who borrowed money for school from predatory lenders.
The former ombudsman wrote a blistering letter of resignation addressed to the Director of the Office of Management and Budget and Acting Director of the Consumer Financial Protection Bureau, Mick Mulvaney. He accused Trump’s money man of abusing his power. Frotman wrote this about Mulvaney:
‘(He) has turned its back on young people and their financial futures.’
In the letter, obtained by NPR, Frotman accused Mulvaney and the Trump administration of undermining the CFPB and its ability to protect student borrowers.
NPR reported that the ombudsman also accused Mulvaney and the entire Trump administration of dismantling the CFPB’s ability to provide protections to students. He wrote:
‘Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.’
Since its inception in 2011, CFPB dealt with 60,000 student loan complaints. As a result, the agency was able to return over $750 million dollars to students.
Frotman questioned Mulvaney’s preference for the lenders in this $1.5 trillion student loan industry. The ombudsman clashed with the acting director who has turned these protections aside in favor of the money lenders.
Frotman wrote:
‘The Bureau’s current leadership folded to political pressure… and failed borrowers who depend on independent oversight to halt bad practices.’
After Trump appointed Mulvaney in direct conflict to the agency’s procedure for leadership, the acting director tore into Frotman’s area. He insisted that The Office for Students and Young Consumers should be combined into the CFPB’s financial education office.
That changed the office’s “mission from investigation to information-sharing.” Mulvany told NPR:
‘(The move was) a very modest organizational chart change.’
Consumer activists have been distressed over this lack of student protection. After all, during his stint as South Carolina’s U.S. representative, the Republican Mulvany criticized the CFPB, saying it operated outside of Congressional oversight:
‘(The CFPB is) a joke … in a sick, sad kind of way.’
Frotman began with the CFPB seven years ago, when it was first created. He came in under the Treasury Department’s implementation team.
The CFPB has also been crucial in protecting service members via the Military Lending Act. The ombudsman was able to halt the lenders who preyed upon them.
The originator of the CFPB, Senator Elizabeth Warren (D-MA) tore into Mulvaney as reported by CNN Money:
“In 2015, the CPBB went after CitiGroup for cheating its credit card customers. CFPB forced CitiGroup to return $700 million to people that it cheated. Now, if you had gotten your way, and the CPFB had been abolished in 2012, that $700 million would be in CitiGroup’s bank accounts right now, instead of in the pockets of thousands of Americans, right?’
Mulvaney answered:
‘Not necessarily. The Office of the Control of Currency also has jurisdiction over those actions and could have brought the same action.’
Then, Warren took him down, saying:
“Oh, I see. That could have brought the same actions. That’s the same agency that didn’t bring those actions before the crash of 2008 and that didn’t bring this particular case. But, you know, let’s not kid ourselves, let’s not pretend that you hope that some other agency would do that work, Mr. Mulvaney.’
Featured image is a screenshot via YouTube.
