WASHINGTON — Today, Consumer Financial Protection Bureau student loan ombudsman Seth Frotman resigned from the agency. In part, his resignation letter stated that current leadership under Acting Director Mick Mulvaney “has turned its back on young people and their financial futures.”
Kaitlyn Vitez, Higher Education campaign director, issued the following statement:
“With more than $1.5 trillion in student loan debt nationwide, it’s more important than ever that we have a strong advocate protecting students from predatory financial actors. We’ve lost a key partner in that fight with Seth Frotman’s resignation this morning from the Consumer Bureau.”
“The Bureau’s disbanded Office of Students and Young Consumers, which Frotman ran, returned more than $750 million to wronged student loan borrowers, and filed suits against servicers such as Navient with a history of misleading borrowers. It’s clear that the student loan industry needs a strong, proactive Consumer Bureau to hold bad actors accountable, and that current Bureau leadership has, as Frotman put it, ‘abandoned the very consumers it [was] tasked by Congress with protecting.’ We need a watchdog agency that will defend students, not work alongside powerful special interests.”
“Furthermore, Frotman’s claim that Bureau leadership suppressed a report on student banking account fees is extremely concerning. These allegations threaten the legacy of student consumer protection investigations that the Bureau has pursued, and cast doubt on the leadership’s willingness to stop predatory practices in the future.”
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U.S. PIRG is the federation of state Public Interest Research Groups. PIRGs are non-profit, non-partisan public interest advocacy organizations that stand up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.