CFPB Chief Says Education Department Is Blocking Student Loan Oversight

May 16, 20195:00 AM ET
Heard on Morning Edition
CHRIS ARNOLD

The director of the Consumer Financial Protection Bureau says the Trump administration's Education Department is getting in the way of efforts to police the student loan industry. The revelation, in a letter obtained by NPR, comes at the same time that lawsuits allege that widespread wrongdoing by student loan companies is costing some borrowers thousands of dollars.

CFPB Director Kathy Kraninger explained the problem in an April letter responding to questions from Sen. Elizabeth Warren and other lawmakers about whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans.

A central issue is that companies that manage student loans, known as student loan servicers, are refusing to share information that the CFPB says it needs to perform proper oversight.

"Since December 2017," Kraninger wrote in the letter, "student loan servicers have declined to produce information requested by the Bureau for supervisory examinations" related to federal student loans.

She said servicers are not sharing the information because the Department of Education has issued guidance telling them not to do so, citing "privacy" concerns. Kraninger also said that information from student loan servicers is "necessary for supervisory examinations."

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