‘Characteristic of an overreaching and unaccountable agency’
The Department of Education (DOE) sent a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray Friday afternoon announcing its intent to terminate a data-sharing policy enacted under the Obama administration, according to documents released to The Daily Caller News Foundation.
The DOE and the CFPB entered into an agreement to share data to increase the efficiency of identifying and processing claims of fraud on student loans, specifically for-profit colleges. The goal of the policy was to “collaborate to ensure coordination in providing assistance to and serving borrowers seeking to resolve complaints,” related to either their private education loans or Federal Student Aid.
How the relationship was supposed to work was rather simple. The DOE would provide data to the CFPB, which would in turn source through the various complaints. If the agency found a claim or if a student presented them one, the CFPB was supposed to report it to the DOE, which is subject to congressional oversight. The agreement required that the CFPB report “all complaints related to Title IV federal student loans” to the DOE “within 10 days” of its discovery.
What the CFPB actually did was rather different. When a student made a complaint, the CFPB would start processing themselves. The CFPB “has handled such complaints itself.”
“It is the Department’s role to work with federal student borrowers to ensure that their issues are addressed within the rules applicable to its program. The CPB’s intervention in this area adds confusion to borrowers and servicers who now hear conflicting guidance” for “student loan services for which the Department is responsible,” the letter said.
“This latest expansion is characteristic of an overreaching and unaccountable agency, and it has led to the Department to terminate” the agreement “in order to ensure fair and consistent enforcement.”
“This is another example of the CFPB going rouge and thinking that they are above the law and congressional oversight. Frankly, Secretary Devos is not going to stand for it,” a DOE staffer told TheDCNF.
Cordray is already under fire from Republicans in the House. A subcommittee of the House Financial Services Committee recommended in early August that Cordray be forced to step down after the CFPB refused to comply with an investigation into the CFPB’s rule making process.
The CFPB is also under the microscope of Trump’s deregulatory squad, which includes White House Office of Management and Budget Director Mick Mulvaney and Treasury Secretary Steve Mnuchin.
The CFPB is the brainchild of Sen. Elizabeth Warren of Massachusetts, who believes the bureau is vital to constrain Wall Street and protect ordinary American consumers.