The Trump
administration’s Consumer Financial
Protection Bureau(CFPB) suppressed a report with “new evidence” that some
of the nation’s largest banks were saddling students “with legally dubious
account fees,” according to the bureau’s outgoing ombudsman for student loans.
The ombudsman, Seth Frotman,
made this allegation as part of a broad critique included in his resignation
letter, which he sent to director Mick Mulvaney on August 27. The bureau
has “turned its back on young people and their financial futures” while
“protecting bad actors” in the lending business, the letter alleges.
“You have used the bureau to
serve the wishes of the most powerful financial companies in America,”
Frotman wrote,
addressing Mulvaney. “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’s resignation letter
sheds light on a pair of very important problems: a student
debt crisis that has put millions of Americans in financial peril at
the hands of bad-faith lenders, and the Trump administration’s internal
dismantling (with help from GOP
legislators) of the Consumer Financial Protection Bureau and complete
disregard for consumer protections in general.
“The CFPB has become a cruel
joke under the current administration,” said Alan Collinge, founder of Student Loan Justice, in an interview
with Truthout.
“People being preyed upon by
their student loans had better be looking elsewhere for help. At this point,
they are pretty much on their own.”
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