Top CFPB official resigns, accuses administration of turning its back on students' financial futures

Top CFPB official resigns, accuses administration of turning its back on students' financial futures
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The student loan ombudsman at the Consumer Financial Protection Bureau (CFPB) has resigned, saying the agency's leaders have chosen to serve powerful financial companies instead of consumers, NPR News reported on Monday.

Seth Frotman reportedly said in an official resignation letter that leadership at the CFPB has "turned its back on young people and their financial futures."

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"Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting," he letter read, according to NPR. "Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America." 

The letter was reportedly addressed to Office of Management and Budget Director Mick MulvaneyJohn (Mick) Michael MulvaneyMulvaney will stay on as White House budget chief Trump names Mulvaney acting chief of staff On The Money: Trump leaves GOP in turmoil with shutdown looming | Trump names Mulvaney acting chief of staff | China agrees to 3-month freeze of auto tariffs | Dem to seek Deutsche Bank records of Trump's personal finances MORE, the CFPB's acting director.

Frotman had served as the student loan ombudsman for the last three years, NPR reported. The public radio station noted that in his role, Frotman led the agency's Office for Students and Young Consumers, where he evaluated thousands of complaints from student borrowers and reviewed questionable practices from private lenders, loan services and debt collectors.

Sen. Dick DurbinRichard (Dick) Joseph DurbinSenate heads toward floor fight on criminal justice bill Megyn Kelly on Mika Brzezinski's comment controversy: 'I hope she's forgiven' McConnell sets Monday test vote on criminal justice bill MORE (D-Ill.) said in a tweet that the administration has "has forced another cop from the beat," calling it "shameful."

The CFPB has reviewed more than 60,000 student loan complaints and returned more than $750 million to aggrieved borrowers since 2011, according to NPR.

But the office has changed under the Trump administration. For example, in August 2017 the Department of Education announced it would no longer share info with the CFPB regarding its review of federal student loans, NPR reported.

“The Bureau's current leadership folded to political pressure... and failed borrowers who depend on independent oversight to halt bad practices,” Frotman wrote in his letter, according to NPR.

Frotman’s resignation comes as the Department of Education continues to propose changes regarding aid meant for defrauded students.

In December 2017, the Department of Education announced new rules for providing aid to students who said they were defrauded by their colleges. The new system would limit some student loan refunds by tying it to their income.

The New York Times reported in May that the Education Department had largely dismantled a team charged with investigating abuses by for-profit colleges.

--This report was updated at 12:06 p.m.