As of September 1, 2018, the student loan ombusdman and assistant director
at the Consumer Financial Protection Bureau (CFPB), Seth Frothman, has resigned.
In his scathing resignation letter to acting director Mick Mulvaney dated
August 27, 2018, he writes "Unfortunately, under your leadership,
the bureau has abandoned the very consumers it is tasked by Congress with
protecting,” and “Instead, you have used the bureau to serve
the wishes of the most powerful financial companies in America.”
He complained that the organization was no longer enforcing the law.
Mulvaney announced a restructuring in May that stripped CFPB's student
lending oversight office of many functions, excluding consumer education.
As their ability to be an industry watchdog has been stripped, this could
mean bad news for student loan borrowers, which were previously able to
obtain some $750 million in refunds while Richard Cordray directed the
CFPB. Now, borrowers may have one less avenue to address issues brought
on by their lenders. Unfortunately, this might've been the most effecttive
avenue for addressing many student loan servicing issues at a global level.
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Although these recent changes may increase the burden on the large pool
of borrowers facing student loan issues, aggrieved borrowers may still
contact state regulators and private attorneys. At the Law Office of Simon
Goldenberg, PLLC, we help people negotiate settlements on defaulted private
student loans, and help people get their federal loans back in good standing
Struggling with student loan debt in New York or New Jersey? Contact our
experienced attorneys at (347) 389-0245.