According to Reuters, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray wrote a letter to Department of Education Secretary Betsy DeVos in which he defended the actions of his bureau and called for the two entities to continue working together.
The letter, reportedly quite lengthy, was sent to Secretary DeVos on Thursday, September 7th. The note was in response to the Education Department’s letter to the CFPB last Thursday, informing the bureau that their information-sharing partnership had been terminated.
The letter penned by Cordray, an Obama-era appointee, called for the Education Department and the CFPB to mend fences and return to their old working relationship. Cordray pleaded with DeVos to have a “constructive conversation” regarding the sharing of student loan data.
Additionally, Cordray wrote the following: “There is plenty of work for each of us to do, but I believe we can generally do it better working together.”
Last Thursday, August 31st, the Department of Education terminated two information-sharing agreements with the CFPB.
The two agreements, the “Memorandum of Understanding (MOU) Between the Bureau of Consumer Financial Protection and the U.S. Department of Education Concerning the Sharing of Information” and the “Memorandum of Understanding Concerning Supervisory and Oversight Cooperation and Related Information Sharing Between the U.S. Department of Education and the Consumer Financial Protection Bureau,” were signed in 2011 and 2014, respectively.
Both agreements pertained to the sharing of sensitive student loan information that is used to regulate the private actors involved in the federal student loan servicing programs, including student loan servicers like Navient and Nelnet. The Department of Education was disgruntled with CFPB for failing to alert the Education Department of student borrower complaints within the 10-day window that was agreed upon. Additionally, the consumer watchdog organization was taking their own action regarding the complaints, instead of first informing the Department of Education.
While MOUs are not legally binding contracts, they do involve a level of respect and seriousness that make the agreements more legitimate than hand-shake deals. Both of the MOUs will officially be terminated 30 days after August 31st.
Despite the Department of Education’s assertion that the CFPB exceeded its authority and jurisdiction into unforeseen areas, thus overcomplicating the student borrower complaint process, Cordray is holding firm that the CFPB did nothing out of line.
The CFPB director only believes that the CFPB fulfilled its purposes outlined by federal law to track individual complaints and enforce federal consumer law.
Author: Mike Brown
Your Guide to Financial Freedom
Money tips, advice, and news once a week
Join the LendEDU newsletter!Thanks for submitting!Please Enter a valid email
Student Loan Guides
Student Loan Reviews