WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking Committee, today blasted the head of the Consumer Financial Protection Bureau (CFPB) for failing to help the 44 million American student loan borrowers and criticized her lack of oversight over the student loan market.
“The amount of student loan debt is shaking the very foundation of the American middle class. And yet, in the last 15 months, the CFPB has not taken a single new action to help these 44 million student loan borrowers,” Sen. Menendez said to CFPB Director Kathleen Kraninger. “On the contrary, the CFPB closed the only office in the federal government whose sole priority is to protect student borrowers, withdrew a planned student loan servicing rulemaking that would have provided enhanced student protections, and refused to publish findings about how big banks were charging students outrageous fees.”
When asked by Sen. Menendez why 99% of Public Service Loan Forgiveness applicants are denied, Kraninger blamed the Department of Education (ED), but Kraninger has yet to coordinate with ED to address these inequities, despite being on the job for several months.
“You need to use your authorities and you’re just not doing that,” insisted Sen. Menendez, frustrated by Kraninger’s failure to exercise her authority to help consumers like student loan borrowers and military servicemembers. “And three months on the job, that’s not the answer – you need to make this a priority and if you don’t, you’re not helping consumers. The whole purpose of this entity is to stand up for the little guy against those who have enormous power and the ability to push back.”
The position of student loan ombudsman, tasked with protecting student loan borrowers from predatory lending, has been vacant since Seth Frotman resigned last summer. In a scathing resignation letter to former CFPB Acting Director Mick Mulvaney, Frotman wrote that “the Bureau has abandoned the very consumers it is tasked by Congress with protecting” and “undercut enforcement of the law, undermined the Bureau’s independence, and shielded bad actors from scrutiny.”
September 16, 2021
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