The top student-loan official at the Consumer Financial Protection Bureau (pictured) wrote in his resignation letter that the federal agency does the “bare minimum” to protect consumers but goes “above and beyond” to cater to big companies.Andrew Harnik, AP Images
Seth Frotman, student-loan ombudsman at the Consumer Financial Protection Bureau, is resigning from his post in protest next month. Frotman wrote in a resignation letter, made public on Monday, that the federal watchdog agency had pivoted to serve financial companies instead of the consumers the bureau was charged with protecting.
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The top student-loan official at the Consumer Financial Protection Bureau (pictured) wrote in his resignation letter that the federal agency does the “bare minimum” to protect consumers but goes “above and beyond” to cater to big companies.Andrew Harnik, AP Images
Seth Frotman, student-loan ombudsman at the Consumer Financial Protection Bureau, is resigning from his post in protest next month. Frotman wrote in a resignation letter, made public on Monday, that the federal watchdog agency had pivoted to serve financial companies instead of the consumers the bureau was charged with protecting.
Frotman has worked as the top student-loan official in the bureau since 2016.
In his letter to Mick Mulvaney, the CFPB’s acting director, Frotman wrote that consumers are no longer the organization’s priority. “After 10 months under your leadership, it has become clear that consumers no longer have a strong, independent Consumer Bureau on their side,” Frotman wrote.
Frotman added that the U.S. Education Department’s move to stop collaborating with the CFPB in the supervision of student-loan companies undermines the bureau’s work to oversee the student-loan market independently.
He also wrote that the CFPB now does the “bare minimum” to protect consumers but goes “above and beyond” for big financial companies.
“For example, late last year, when new evidence came to light showing that the nation’s largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees, Bureau leadership suppressed the publication of a report prepared by Bureau staff,” Froman wrote. “When pressed by Congress about this, you chose to leave students vulnerable to predatory practices and deny any responsibility to bring this information to light.”
From the early days of the Trump administration, advocates feared that the bureau’s consumer focus would be weakened. And moves by the education secretary, Betsy DeVos, to scale back some consumer protections have also drawn criticism.
A spokesman for the bureau declined to comment on Frotman’s resignation.
Fernanda is the engagement editor at The Chronicle. She is the voice behind Chronicle newsletters like the Weekly Briefing, Five Weeks to a Better Semester, and more. She also writes about what Chronicle readers are thinking. Send her an email at fernanda@chronicle.com.
