Your student loan advocate just quit

Seth Frotman’s job was to look out for students and their loans, overseeing $1.5 trillion worth of loans to over 44 million borrowers.

He answered questions, resolved issues, and reviewed complaints as the Student Loan Ombudsman of the Consumer Financial Protection Bureau (CFPB), which is the federal agency in charge of protecting consumers.

The CFPB was established in response to the ’08 financial crisis when our government agreed to protect citizens not only from products but also from financial wrongdoing.

Seth Frotman joins a long list of people pushed out following the change from Obama to Trump.

Backstory

Dodd-Frank

Harvard Professor Elizabeth Warren writes a paper that ultimately asks: if the government protects its citizens against products, shouldn’t it also protect its citizens against financial institutions?

The financial crisis occurs.

The 2010 Dodd-Frank Act puts regulations on the financial industry and mortgage lenders to protect consumers. It’s very controversial: supporters say Wall Street needs regulation; opponents say it overburdens institutions and therefore slows economic growth. Check out the debate here.

The Dodd-Frank Act also results in the Consumer Financial Protection Bureau (CFPB) that protects consumers from the corrupt business practices of banks, to stop risky lending, oversee credit and debit agencies and other consumer loans.

Seth Frotman is the latest casualty in an effort to weaken the bureau. Read his resignation letter here.


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