The U.S. Department of Education has ended an agreement with the Consumer Financial Protection Bureau, or CFPB, the agency tasked with investigating financial fraud and mistreatment. In partnership with the Department of Education, the CFPB has been working to investigate complaints about student lenders and for-profit colleges.
These enforcement efforts recently resulted in a settlement with a private lender that will pay at least $21 million back to students who were illegally sued over debts. But now that the federal agency has announced it will no longer share information with the CFPB, there’s concern that private student loan lenders and for-profit colleges will be held less accountable.
Wyoming Senator Mike Enzi has a track record for being concerned with students’ financial rights, but he agrees with the Department of Education’s stance that the CFPB was “overreaching and unaccountable.”
Enzi’s press secretary, Max D’Onofrio said: “I think the CFPB sounds like a really great name. People love how it sounds, because you want those consumer protections. We can agree on that.”
But in response to the concern that there will be less enforcement, D’Onofrio said he believes there are still agencies out there keeping an eye out for student borrowers, and he suggested some of this task might be picked up by Congress.
“So even if someone believes it’s a good idea, you have to make sure you are going about it in the right way,” D’Onofrio said.
He said the intention was not to let private lenders off the hook, but to check the agency’s power.