The Consumer Financial Protection Bureau (CFPB) earlier this month appointed a former official from the Pennsylvania Higher Education Assistance Agency (PHEAA) — a federal student loan servicer — to resolve complaints from borrowers for the bureau. On Monday, Sen. Elizabeth Warren (D-MA) released a series of letters she wrote in which she called the move “an outrageous slap in the face to student loan borrowers across the country.”
The private student loan ombudsman position has been vacant since Seth Frotman resigned last year due to issues with the leadership and went on to found the Student Borrower Protection Center. On Aug. 16, 2019, CFPB announced that army veteran Robert Cameron, a colonel and staff judge advocate for the Pennsylvania Army National Guard, would be assuming the role. When he worked at PHEAA, Cameron was responsible for litigation, compliance, and risk mitigation efforts.
NPR, which first reported the story on Warren’s letters, noted that the announcement made no mention of federal student loans or federal loan servicers, instead explicitly stating that Cameron will be “charged with receiving, reviewing, and resolving borrower complaints.” While the bureau did not respond to NPR for comments, NPR wrote that “CFPB seems to be signaling that this ombudsman will no longer look out for the lion's share of borrowers.”
Following the announcement, Warren wrote to CFPB Director Kathy Kraninger, Treasury Secretary Steven Mnuchin, and Cameron, arguing that Cameron “is not qualified” to assist student borrowers due to his connection to PHEAA. Warren in her letters pointed to the loan servicer’s history of compliance issues and a series of government audits “that revealed just how miserably PHEAA has been failing student loan borrowers.”
“PHEAA has a record of failing borrowers,” Warren wrote. “It is mind-boggling that the CFPB’s top official responsible for overseeing this loan servicer’s compliance activities is now tasked with protecting borrowers from mistreatment from PHEAA and other student loan companies and servicers… I implore you to replace Mr. Cameron with someone with a proven track record of consumer advocacy, not an industry insider. ”
In her letter to Cameron, Warren urged him to reconsider his decision to accept the job, adding that “if you do not do so, I minimally ask that you recuse yourself from all matters that directly or indirectly affect PHEAA for the duration of your tenure at CFPB.”
Warren also wrote that she still working to turn legislation she introduced last year — the Anti-Corruption and Public Integrity Act — into law, which would “ban corporate executives whose companies are caught breaking federal law from working in the federal government, and require most federal officials to recuse from any decisions that affect their former employer for at least four years.
Publication Date: 8/28/2019