As of September 1, 2018, the student loan ombusdman and assistant director at the Consumer Financial Protection Bureau (CFPB), Seth Frothman, has resigned.
In his scathing resignation letter to acting director Mick Mulvaney dated August 27, 2018, he writes "Unfortunately, under your leadership, the bureau has abandoned the very consumers it is tasked by Congress with protecting,” and “Instead, you have used the bureau to serve the wishes of the most powerful financial companies in America.” He complained that the organization was no longer enforcing the law.
Mulvaney announced a restructuring in May that stripped CFPB's student lending oversight office of many functions, excluding consumer education. As their ability to be an industry watchdog has been stripped, this could mean bad news for student loan borrowers, which were previously able to obtain some $750 million in refunds while Richard Cordray directed the CFPB. Now, borrowers may have one less avenue to address issues brought on by their lenders. Unfortunately, this might've been the most effecttive avenue for addressing many student loan servicing issues at a global level.
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Although these recent changes may increase the burden on the large pool of borrowers facing student loan issues, aggrieved borrowers may still contact state regulators and private attorneys. At the Law Office of Simon Goldenberg, PLLC, we help people negotiate settlements on defaulted private student loans, and help people get their federal loans back in good standing after default.
Struggling with student loan debt in New York or New Jersey? Contact our experienced attorneys at (347) 389-0245.