Eight Senate Democrats are calling on Kathleen Kraninger, the director of the Consumer Financial Protection Bureau, to “do your job” and “stand up” to Betsy DeVos, the Secretary of Education, over an “abandonment” of regulating part of the student loan servicing market.
The Democrats, including Sen. Elizabeth Warren [D-Mass.] and Sen. Sherrod Brown [D-Ohio], the ranking member of the Senate Banking Committee, sent a letter to Kraninger yesterday related to oversight of student loan services who are collecting on loans guaranteed by the federal government.
The CFPB and the Department of Education have been battling for years over which entity should regulate student loan servicers that are collecting on loans guaranteed by the federal government. Kraninger has said the CFPB has been blocked by the Education Department on its attempts to regulate those servicers.
Both the CFPB and the Department of Education were sued in November by a consumer advocacy for “abandon[ing]” its authority for “ignoring industry abuses.”
While the Senators acknowledged that Kraninger inherited the situation with the Education Department, they accused her of allowing it to “fester.”
“In the one year since you became Director, you have failed to confront the Department, seek a court order, or take any other measure to ensure the Bureau has access to student loan information so that it can resume examinations of student loan servicers’ handling of federally owned loans,” they wrote.
Along with calling on Kraninger to take “immediate” steps to do what is needed to resume overseeing those servicers, the Senators also requested information and a timeline from Kraninger to resume its examinations.