Another fox assigned to watch the hen house...
CFPB taps student loan executive
Robert Cameron, pick for top watchdog role, comes from a firm that was cited for poor industry practices.
The Trump administration has appointed a longtime student loan industry executive to be the federal government’s top watchdog for the $1.5-trillion student loan market.
Robert Cameron will serve as the Consumer Financial Protection Bureau’s new student loan ombudsman, the bureau said Friday. The job was designed to protect student loan borrowers from poor practices in the student loan industry. It’s one of the few jobs explicitly named in the Dodd-Frank Act, the law passed after the 2008 financial crisis that created the CFPB. It’s considered the go-to office for borrowers who have complaints about their loans.
Cameron most recently worked at the Pennsylvania Higher Education Assistance Agency, better known as Fed Loan Servicing, as its head of compliance and risk mitigation. That agency has been cited for poor industry practices, most notably for how it has handled the troubled Public Service Loan Forgiveness Program
, designed to allow student loan borrowers who work in public service jobs to get part of their loan balances forgiven.
A report by the Department of Education’s Inspector General’s Office released this year found that Fed Loan employees received a “fail” grade on interactions with borrowers 11% of the time, far more than the industry average of 4%.
The CFPB’s student loan ombudsman position has been vacant for nearly a year. Seth Frotman, an Obama administration appointee, quit in protest
of the Trump administration’s handling of the issue of student loans. Frotman said at the time that the White House was hostile to protecting borrowers and had used the Consumer Financial Protection Bureau to serve powerful companies’ interests.
Frotman now runs the Student Borrower Protection Center, trying to do from outside the federal government what he had been doing at the bureau.
“It is outrageous that an executive from the student loan company that has cheated students and taxpayers, and is at the center of every major industry scandal over the past decade, is now in charge of protecting borrowers’ rights,” Frotman said Friday in a statement.
Mounting levels of student debt remain a hot political topic, with some 2020 Democratic presidential candidates calling for a national student loan forgiveness program. One in 10 student loan borrowers has fallen behind on repaying loans.