The federal official in charge of protecting student borrowers from predatory lending practices has stepped down.
In a scathing resignation letter, Seth Frotman, who until now was the student loan ombudsman at the Consumer Financial Protection Bureau, says current leadership "has turned its back on young people and their financial futures." The letter was addressed to Mick Mulvaney, the bureau's acting director.
In the letter, obtained by NPR, Frotman accuses Mulvaney and the Trump administration of undermining the CFPB and its ability to protect student borrowers.
"Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting," it read. "Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America."
The letter raises serious questions about the federal government's willingness to oversee the $1.5 trillion student loan industry and to protect student borrowers.
Frotman has served as student loan ombudsman for the past three years. Congress created the position in 2010, in the wake of the financial crisis, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As ombudsman and assistant director, Frotman oversaw the CFPB's Office for Students and Young Consumers and reviewed thousands of complaints from student borrowers about the questionable practices of private lenders, loan servicers and debt collectors.
Read more about this resignation at NPR.org