The consumer protection official charged with safeguarding student borrowers is resigning in protest of the Trump administration, claiming it is siding with predatory lenders over consumers and enacting policies that will lead to “far-reaching harm.”
Seth Frotman wrote in a scathing letter that he would leave his position as student loan ombudsman at the Consumer Financial Protection Bureau at the end of the week. Frotman has held the position since 2015 and has been at the bureau since 2011.
“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” Frotman wrote to Mick Mulvaney, the bureau’s acting director. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
Among his charges is that the bureau squashed publication of data showing banks are ripping off college students with “legally dubious” debit card fees. People familiar with the situation said that staff had discovered abuses with debit cards, which they said became vehicles for abuse after crackdowns on credit card rules. But the law only mandates that information on credit cards be published, and Mulvaney would not let the report go beyond that.
Read more in the Washington Post.