A group of 15 Democratic Senators last night sent a letter to Mick Mulvaney, the acting director of the Bureau of Consumer Financial Protection, “seeking information so that we may evaluate the independence and effectiveness” of the agency’s student loan ombudsman’s office.
The letter follows the resignation of Seth Frotman, the BCFP’s former student loan ombudsman who resigned last month and leveled a number of accusations at the federal government in his resignation letter.
In his letter, Frotman said the BCFP has “abandoned” consumers that the agency is meant to protect, accusing Mulvaney of using the agency “to serve the wishes of the most powerful financial companies in America.”
The Senators accuse Mulvaney of a conflict of interest, between his jobs as director of the Office of Management & Budget and temporarily running the BCFP. As director of OMB, it’s Mulvaney’s job to “shield” the agencies he oversees, including the Department of Education, which may have “inhibited” enforcement actions undertaken at the BCFP.
The letter asks eight questions of Mulvaney, including:
- How many supervisory examinations of large student loan servicing companies has the CFPB performed in the last 10 months?
- How many enforcement actions have career staff recommended be undertaken against student loan servicers?
- Have any of these recommendations been acted upon to date?
The letter also seeks additional information related to a claim made by Frotman that the BCFP suppressed a report that revealed some of the nation’s largest financial institutions were “saddling” students with “dubious account fees.”
Mulvaney spoke to the moral issues facing individuals who take out student loans earlier this week, saying he’s not sure that students fully understand the consequences associated with having to repay loans. During the interview, Mulvaney also said he never met Frotman and that the resignation letter was an attempt to garner headlines.