Democratic Senators Send Scalding Letter to Mulvaney, Demand Answers Following Resignation of Student Loan Ombudsman

A group of 15 Democratic senators sent a letter to the Bureau of Consumer Financial Protection’s (BCFP or Bureau) Acting Director Mick Mulvaney on September 13, 2018, inquiring about the resignation of Seth Frotman, the Bureau’s now-former Student Loan Ombudsman. As previously published by insideARM, Mr. Frotman sent a resignation letter to Acting Director Mulvaney on August 27, 2018, blasing the Bureau’s current direction and accusing the Bureau of failing the consumers it was created to protect. Democratic senators now want answers to the accusations made in the Frotman letter.

The senators’ letter expresses shock at the contents of the Frotman letter and accuses Acting Director Mulvaney of failing consumers in two main ways. First, the letter accuses the Bureau of abandoning consumers by failing to uphold its supervisory responsibilities over student loan servicers, and over violations of the Military Lending Act. Second, the letter accuses Mulvaney of politicizing the BCFP, expressing concerns that a political hire may “overrule the independent judgment of the Ombudsman’s office.”

The senators requested answers to certain questions stemming from the Frotman letter. Specifically, the questions revolve around:

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