Seth Frotman, assistant director and student loan ombudsman at the Consumer Financial Protection Bureau, resigned from his position, rebuking Acting Director Mick Mulvaney on his way out the door, according to reporting from National Public Radio.
Frotman's resignation, according to the letter, is effective on Sept. 1.
In a scathing letter addressed to Mulvaney, Frotman accused the agency of turning its back on young people and their financial futures and serving the best wishes of companies over consumers.
"Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America," Frotman wrote.
From the letter, which can be read here:
Each year, tens of millions of student loan borrowers struggle to stay afloat. For many, the CFPB has served as a lifeline, cutting through red tape, demanding systematic reforms when borrowers are harmed, and serving as the primary financial regulator tasked with holding student loan companies accountable when they break the law.
The hard work and commitment of the immensely talented Bureau staff has had a tremendous impact on students and their families. Together, we returned more than $750 million to harmed student loan borrowers in communities across the country and halted predatory practices that targeted millions of people in pursuit of the American Dream.
The challenges of student debt affect borrowers young and old, urban and rural, in professions ranging from to clergymen. Tackling these challenges should know no ideology or political persuasion. I had hoped to continue this critical work in partnership with you and your staff by using our authority under law to stand up for student loan borrowers trapped in a broken system.
Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.
In May, Mulvaney announced that he was dramatically reorganizing the structure of bureau and folding Frotman’s division, the Office of Students and Young Consumers, into the Office of Financial Education. Previously, Mulvaney moved to rescind regulation by enforcement and restructure the bureau altogether.
The decision was met with fervent protest from Ranking Member of the House Committee on Financial Services Maxine Waters, D-Calif., who said the restructuring sends a clear message that political appointees are infiltrating the agency with an ideology that will put consumers last.
“The closing of the Office of Students and Young Consumers is deeply concerning and will most certainly set back the progress the Consumer Bureau had made to protect our nation’s students and consumers,” Waters said at the time. “Under the leadership of Richard Cordray, the Consumer Bureau was vigilant in protecting the over 44 million student borrowers who collectively carry over $1.48 trillion in student loan debt in this country.”
