The Consumer Financial Protection Bureau announced the hiring of a student loan ombudsman on Friday, but the individual who was hired has rankled consumer advocates and liberal lawmakers and the job description for the position appears to have changed from its original oversight responsibilities.
Robert G. Cameron was named the ombudsman for private loans on Friday, which is a narrower realm of responsibility that previous individuals who held the position. The student loan ombudsman used to have oversight of federal student loans as well as private student loans.
Cameron most recently was in charge of compliance, litigation, and risk mitigation efforts at the Pennsylvania Higher Education Assistance Agency, one of the nation’s largest student loan servicers.
Cameron’s hiring by the CFPB shows the agency has no regard for student loan borrowers, claimed critics, including Cameron’s immediate predecessor.
“It is outrageous that an executive from the student loan company that has cheated students and taxpayers — and is at the center of every major industry scandal over the past decade — is now in charge of protecting borrowers’ rights,” said Seth Frotman, executive director of the Student Borrower Protection Center. Before starting the SBPC, Frotman was the CFPB’s student loan ombudsman, who resigned a year ago in a blaze of glory.
The CFPB did not specifically mention why Cameron, who is a veteran of the U.S. Army, was not going to oversee federal student loans as well as private ones. But it has been the Trump Administration’s position that federal student loans fall exclusively under the purview of the Department of Education.
Cameron’s hiring incited a familiar rallying cry among consumer advocates, who urged states to step up their enforcement efforts in the wake of what they view is a retreat by the CFPB.
“The student loan ombudsman should protect student loan borrowers from poor practices in the student loan industry,” said Debbie Goldstein, executive vice president of the Center for Responsible Lending, in a published report. “Instead, by appointing a former student loan servicer executive to oversee the student loan market, the federal government is signaling that it is not interested in the nation’s 44 million student loan borrowers or their families. In the absence of real federal oversight, states have no choice but to step up and protect student loan borrowers.”
