CFPB student loan ombudsman resigns since Trump administration sides with banks not students

The CFPB was pretty good at helping students who were hurt by predatory colleges and lenders

Since 2011, the CFPB has handled more than 60,000 student loan complaints and, through its investigations and enforcement actions, returned more than $750 million to aggrieved borrowers. Frotman’s office was central to those efforts. It also played a role in lawsuits against for-profit giants ITT Tech and Corinthian Colleges and the student loan company Navient.

This, of course, could not be abided and the Trump administration struck back:

Over the past year, the Trump administration has increasingly sidelined the CFPB’s student loan office. Last August, the U.S. Department of Education announced it would stop sharing information with the bureau about the department’s oversight of federal student loans, calling the CFPB “overreaching and unaccountable” and arguing that the bureau’s actions were confusing borrowers and loan servicers alike. Of the move, Frotman writes, “the Bureau’s current leadership folded to political pressure … and failed borrowers who depend on independent oversight to halt bad practices.”

In May, Mulvaney called for a major shake-up in Frotman’s division. The Office for Students and Young Consumers would be folded into the bureau’s financial education office, signaling a symbolic shift in mission from investigation to information-sharing. While the CFPB told NPR at the time that the move was “a very modest organizational chart change,” consumer advocates reacted with alarm.

Seth Frotman, who was in charge of student loans at the CFPB has finally had enough and resigned today with a nice little letter:

The challenges of student debt affect borrowers young and old, urban and rural, in professions ranging from to clergymen. Tackling these challenges should know no ideology or political persuasion. I had hoped to continue this critical work in partnership with you and your staff by using our authority under law to stand up for student loan borrowers trapped in a broken system. Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.

As the Bureau official charged by Congress with overseeing the student loan market,1 have seen how the current actions being taken by Bureau leadership are hurting families. In recent months, the Bureau has made sweeping changes, including:

  • Undercutting enforcement of the law.
  • Undermining the Bureau’s independence.
  • Shielding bad actors from scrutiny. The current leadership of the Bureau has turned its back on young people and their financial futures. Where we once found efficient and innovative ways to collaborate across government to protect consumers, the Bureau is now content doing the bare minimum for them while simultaneously going above and beyond to protect the interests of the biggest financial companies in America. For example, late last year, when new evidence came to light showing that the nation’s largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees, Bureau leadership suppressed the publication of a report prepared by Bureau staff. When pressed by Congress about this, you chose to leave students vulnerable to predatory practices and deny any responsibility to bring this information to light.

Oh sorry, I meant a scathing letter noting the Trump administration cares more about banks than students. Mulvaney probably sees that as a compliment.

 

Lock them up

It was not a good day for Donald Trump yesterday. Paul Manafort, who was his campaign manager for five months, was convicted on eight counts:

Manafort was convicted of five counts of tax fraud, two counts of bank fraud, and one count of failure to disclose a foreign bank account. The jury was unable to reach a verdict on the remaining 10 counts, and the judge declared a mistrial on those charges.

This one seems like a building block case for the possible Russian collusion-it doesn’t talk about the collusion directly but it shows Manafort committed crimes while working with people who worked with Russians, if there was collusion he was probably involved.

In the second case, Michael Cohen pled guilty to counts of breaking campaign finance laws, tax evasion, and bank fraud. This seems less related to Russian collusion but was more directly damaging to Trump:

Michael Cohen, President Trump’s former lawyer, made the extraordinary admission in court Tuesday that Trump had directed him to arrange payments to two women during the 2016 campaign to keep them from speaking publicly about affairs they said they had with Trump.

The whole Mueller probe seems like a classic mob prosecution. It started with lesser figures and is working it’s way in (see who has been charged so far here). There is already enough so that the House should be talking about impeachment, but that’s unlikely as long as Republicans hold the majority. Vote in November.

President Trump: traitor or just Russian apologist?

President Trump thinks both the US and Russia are to blame for bad relations:

Yes, I do. I hold both countries responsible. I think that the United States has been foolish. I think we’ve all been foolish. We should have had this dialogue a long time ago — a long time, frankly, before I got to office. And I think we’re all to blame. I think that the United States now has stepped forward, along with Russia. And we’re getting together. And we have a chance to do some great things, whether it’s nuclear proliferation, in terms of stopping — because we have to do it. Ultimately, that’s probably the most important thing that we can be working on.

But I do feel that we have both made some mistakes. I think that the probe is a disaster for our country. I think it’s kept us apart. It’s kept us separated. There was no collusion at all. Everybody knows it. People are being brought out to the fore.

And he believes both Putin and the US intelligence agencies:

So let me just say that we have two thoughts. You have groups that are wondering why the FBI never took the server. Why haven’t they taken the server? Why was the FBI told to leave the office of the Democratic National Committee? I’ve been wondering that. I’ve been asking that for months and months, and I’ve been tweeting it out and calling it out on social media. Where is the server? I want to know, where is the server? And what is the server saying?

With that being said, all I can do is ask the question. My people came to me — Dan Coats came to me and some others — they said they think it’s Russia. I have President Putin; he just said it’s not Russia.

I will say this: I don’t see any reason why it would be, but I really do want to see the server. But I have — I have confidence in both parties. I really believe that this will probably go on for a while, but I don’t think it can go on without finding out what happened to the server. What happened to the servers of the Pakistani gentleman that worked on the DNC? Where are those servers? They’re missing. Where are they? What happened to Hillary Clinton’s emails? Thirty-three thousand emails gone — just gone. I think, in Russia, they wouldn’t be gone so easily. I think it’s a disgrace that we can’t get Hillary Clinton’s 33,000 emails.

So I have great confidence in my intelligence people, but I will tell you that President Putin was extremely strong and powerful in his denial today. And what he did is an incredible offer; he offered to have the people working on the case come and work with their investigators with respect to the 12 people. I think that’s an incredible offer.

Ok, I have to admit I’m not sure if he’s saying that he trusts them both or squirrel.

For fun Putin implied that Trump wants to help prop up oil and gas prices:

If I may, I’d throw in some two cents. We talked to Mr. President, including this subject as well. We are aware of the stance of President Trump. And I think that we, as a major oil and gas power — and the United States, as a major oil and gas power as well — we could work together on regulation of international markets, because neither of us is actually interested in the plummeting of the prices.

Trump administration: Criminal Banks shouldn’t get blamed

How friendly can the Trump administration be to banks? Pretty friendly:

The Office of the Comptroller of the Currency, the nation’s main bank regulator, found “bank-specific instances of accounts being opened without proof of customer consent” as part of a review of more than 40 banks spurred by the Wells Fargo scandal, agency spokesman Bryan Hubbard told The Times in an email Friday.

However, the agency will not be naming the banks where it found potentially unauthorized accounts or providing details on banks’ specific conduct, he said.

Don’t worry, the spokesman for the OCC says it’s not a problem:

Though Hubbard said the agency would not release details of specific issues at specific banks, he did say that there were “isolated instances of employee misconduct with no clear connection to sales goals, incentives or quota programs.”

Hubbard said some banks showed they did not have proper controls in place while running short-term promotions, leading to cases where banks could not prove customers had authorized new accounts. In some cases, banks could not prove customers had given consent because of poor documentation, incomplete records or “technology issues,” he said.

Generally, Hubbard said the review did not find “systemic issues with bank employees opening accounts without the customer’s consent,” though most institutions did not take a “holistic” approach to managing risks associated with sales practices.

This is the same view that the police have for most criminals–if I only robbed one bank, they would give me a warning I assume.

And the Trump administration is just getting started:

Since taking over the OCC in November, Otting, a longtime commercial banker, has pushed to scale back rules and reporting requirements for banks, recently lifting restrictions — put in place by his predecessor — on banks offering small consumer loans. He’s also made it a priority for the OCC to rewrite federal rules that require banks to lend in low-income and minority communities.

A little history:

Before they reunited in Washington, Otting and Mnuchin were the chief executive and chairman, respectively, of Pasadena’s OneWest Bank, an institution built from the shell of failed mortgage lender IndyMac. Both Mnuchin and Otting faced questions about OneWest’s foreclosure practices during their confirmation hearings.

OneWest is the bank known for its foreclosures:

“Mr. Otting has no experience as a bank supervisor, but he has helped lead a bank that illegally foreclosed on working families and paid a multimillion dollar fine for defrauding the government,” Sen. Elizabeth Warren said in a statement to POLITICO.


“Just like Mr. Mnuchin, Mr. Otting made a fortune profiting off of a foreclosure crisis that devastated millions of Americans, including countless Nevadans,” Sen. Catherine Cortez Masto, who hails from Otting’s home state, said in a statement.

Last month, a reverse mortgage subsidiary of OneWest, now owned by CIT Group, reached an $89 million settlement with the Justice Department for allegedly defrauding the government by seeking insurance payments from the Federal Housing Administration that it did not qualify for. The allegations cover the period between 2011 and 2016; Otting was CEO of OneWest from 2010 to 2015.

You can see why Otting doesn’t want to punish other banks. He’s just another Trump guy who cares more about big business than everyday Americans.

How Betsy Devos studies violence in schools

Well, this is just surreal:

“Will your commission look at the role of firearms as it relates to gun violence in the schools?” Leahy asked.

“That is not part of the commission’s charge, per se,” DeVos replied.

“I see. So you’re studying gun violence and not considering the role of guns,” Leahy said.

“We are actually studying school safety and how we can ensure the students are safe at school,” DeVos said.

And they’re not doing much studying of school safety either (bold added):

DeVos’s commission has never met, but she has hosted listening sessions at Education Department headquarters and last week visited a Maryland elementary school that employs a strategy that teaches students interpersonal skills and encourages them to connect with one another. Gun restrictions were not discussed during the session, which lasted nearly five hours.

The Education Department is set to host a forum Thursday, allowing members of the public to share their suggestions on reducing school violence with the commission. DeVos, who is traveling to Switzerland to learn about Swiss-style apprenticeships, will not be in attendance.

She’s one of the best, Trump hired only the best.

Trump will pardon convicted felon D’Souza

Donald Trump has tweeted that he will pardon convicted felon Dinesh D’Souza:

Will be giving a Full Pardon to Dinesh D’Souza today. He was treated very unfairly by our government!

Let’s go back and see what D’Souza was convicted of:

Conservative author and filmmaker Dinesh D’Souza entered a guilty plea Tuesday to a charge that he used straw donors to make $20,000 in illegal contributions to Republican Senate candidate Wendy Long in 2012, officials said.

and what he said at the time:

“I knew that causing a campaign contribution to be made in the name of another was wrong and something the law forbids,” D’Souza said, according to Newsday. “I deeply regret my conduct.”

and let’s remember how he did it:

Evidence disclosed in pre-trial motions indicated that two of the illegal donations were routed through D’Souza’s mistress, Denise Joseph, and her husband, Louis Joseph.

In 2012, D’ Souza resigned from his post as president of evangelical King’s College in New York following reports that he attended a South Carolina conference on Christian values accompanied by Denise Joseph and introduced her as his fiancee despite the fact that he was still married at the time to another woman.

I can see why Trump pardoned him, he probably reminds him of himself.

Here’s how Trump protects workers

The Supreme Court ruled that workers can’t bring action collectively if they have an arbitration clause in their contracts:

The Supreme Court has sharply restricted the rights of American workers to join with others to challenge their company for allegedly violating federal laws on wages, overtime pay or civil rights.

The justices by a 5-4 vote Monday agreed with Trump administration lawyers and ruled employers may require workers give up their rights to join together in complaining if they are denied overtime pay or a minimum wage.

So, if your employer underpays all their workers by $10 a week they will have to push their claim individually. Good luck with that.

Now look which side each of the political parties were on:

Obama lawyers agreed with Democratic appointees on the National Labor Relations Board that labor laws from the New Deal era gave workers the right to join together to protect themselves. They pointed to the National Labor Relations Act of 1935, which said workers may join a union or “engage in other concerted efforts” to protect themselves.

Based on that law, they said companies may not enforce arbitration clauses that bar workers from joining together to challenge a company’s policies or work rules.

By contrast, Trump administration lawyers joined with pro-business advocates in favor of binding arbitration. They relied on the Federal Arbitration Act of 1925, which said contracts that call for setting disputes through arbitration “shall be valid, irrevocable and enforceable.”

And who is it most likely to affect?

Labor law experts say that denying group claims will hurt low-wage workers in particular. They will have no practical way to challenge employers who fail to pay them overtime or a minimum wage, they said.

There’s the President, on the side of the common worker like always. As long as you define the common worker as rich business owners.

Justice Ginsburg dissented highlighting part of the NLRA:

Relevant here, §7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectivelythrough representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

The conservative justices twist the words to pretend that the highlighted part can’t possibly apply to arbitration because ‘reasons’. Good old-fashioned judicial activism is alive and well.

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