Richard Cordray Says CFPB and DOE Can Work Together on Student Loans
9/8/2017 1:33 PM
The director of the Consumer Financial Protection Bureau says collaboration on federal student loan oversight and sharing information, such as about student loan borrowers’ complaints, can continue.
Consumer Financial Protection Bureau Director Richard Cordray responded to the U.S. Department of Education’s termination of two Memoranda of Understanding (MOUs) related to federal student loan oversight and sharing of information in a letter stating the two organizations could work together.
Politico reports Cordray said in a letter to U.S. Department of Education (DOE) Secretary Betsy DeVos “that the CFPB has clear authority to conduct the department’s student loan-related oversight—and that it’s effective in helping borrowers.”
The DOE terminated the MOUs with the CFPB citing that the bureau has “violated the intent” of those agreements, ACA International previously reported.
The DOE stated the MOUs were designed as a way for it to collaborate with the CFPB.
In his letter to DeVos, according to Cordray, the collaboration can continue, Politico reports.
“There is plenty of work for each of us to do, but I believe we can generally do it better by working together,” Cordray said in the letter, according to Politico.
The DOE’s letter terminating the MOUs specifically calls out the CFPB for failing to direct complaints related to Title IV federal student loans to the DOE within 10 days of receipt and instead handling the complaints internally, ACA previously reported.
“It is the department’s role to work with federal student borrowers to ensure that their issues are addressed within the rules applicable to its program. The CFPB’s intervention in this area adds confusion to borrowers and servicers who now hear conflicting guidance related to the Title IV student loan services for which the department is responsible,” it states.
According to Politico, Cordray said the CFPB is able to share with the Education Department a borrower’s complaint —as well as a company’s response—in real time because the department’s access to the CFPB portal is part of their arrangement. He noted that in the past three months, the Education Department had accessed the portal 80 times.”
If the termination of the MOUs with the CFPB moves forward, it will be in effect Oct. 1.
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