In Congressional Testimony, Kraninger Cited Vacant Position As Reason for Failing To Coordinate Assistance to Students Subject to Potentially Abusive Loan Servicers
Washington, D.C.— In congressional testimony in March, Consumer Financial Protection Bureau Director Kathleen Kraninger cited the lack of a student loan ombudsman as a reason the CFPB had failed to reestablish a legally-mandated memorandum of understanding (MOU) with the Department of Education to ensure coordination and information sharing to protect students from predatory actions by loan servicers. On Friday, August 16th, Director Kraninger announced Robert G. Cameron as the agency’s new student loan ombudsman and lost the latest excuse for CFPB to evade the law for over two years.
The Dodd-Frank Act of 2010 requires an interagency agreement to ensure that the agencies coordinate and resolve borrower complaints. Secretary of Education Betsy DeVos unilaterally rescinded the existing MOUs in 2017. Director Kraninger acknowledged the CFPB’s legal obligation to maintain the agreement, but laid blame on the lack of a student loan ombudsman.
“By Director Kraninger’s own account, there are no more obstacles preventing her from following the law and establishing a new agreement to protect borrowers,” said Democracy Forward Press Secretary Charisma Troiano. “Director Kraninger’s continued inaction leaves students and families more vulnerable to predatory practices.”
On May 2, 2019, Democracy Forward demanded an investigation by the Inspectors General of the Department of Education and the CFPB into the agencies’ violation of Dodd-Frank.
The agencies’ disregard for this legal requirement appears consistent with a pattern of actions by the Trump administration that diminish student borrower protections.
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Press Contact:
Charisma Troiano
(202) 701-1781
ctroiano@democracyforward.org