California AG Blasts Closure of CFPB’s Students and Young Consumers Office
Consumer Financial Protection Bureau Interim Director Mick Mulvaney Manuel Balce Ceneta / AP Photo
Consumer advocates see it as a sign that the Trump administration has deprioritized scrutiny of predatory college lending.
State attorneys general seeking assurances predatory college loans would remain a Consumer Financial Protection Bureau enforcement priority learned Wednesday its Students and Young Consumers office is no more.
Interim Director Mick Mulvaney sent an email to staff announcing the office will be folded into the Financial Education office, two months after telling state AGs rumors of “dramatic” personnel changes were overblown.
While states like California increase student loan protections, Mulvaney has signaled his priorities are cost efficiency and consumer education.
“Mick Mulvaney, whose very position as Acting Director is legally suspect, has chosen to abandon the CFPB’s office established to oversee college financial aid and lending practices to the sheer delight of predatory for-profit colleges, unscrupulous education lenders and loan servicers, and abusive debt collectors,” said California Attorney General Xavier Becerra said in a statement. “The Trump Administration is inviting the fox to take charge of the henhouse. Aspiring college students and their parents can smell this raw deal from a mile away.”
U.S. students collectively face $1.5 trillion in loan debt, Becerra added.
Consumer advocates worry the restructuring will railroad CFPB’s case against the largest private student lender in the country, Navient. CFPB’s complaint database has seen 53,612 complaints pertaining to student loans—21,348 of them about Navient.
“Student loan borrowers deserve a champion at the CFPB,” said Karl Frisch, executive director of consumer watchdog Allied Progress, in a statement. “Mick Mulvaney is nothing but an industry stooge who will do whatever it takes to support Education Secretary Betsy DeVos in her effort to undermine borrowers and let lenders and loan processors like Navient rip people off without repercussion.”
Dave Nyczepir is a News Editor at Government Executive’s Route Fifty and is based in Washington, D.C.
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