Brown and Murray Demand Answers From New CFPB Student Loan Ombudsman

Washington, D.C. –U.S. Senator Sherrod Brown (D-OH), ranking member of the Senate Banking, Housing, and Urban Affairs Committee  and Senator Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, sent a letter to the Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman Robert Cameron demanding answers as to how he will carry his duties in his new role given his potential conflicts of interest from working for the federal student loan servicer Pennsylvania Higher Education Assistance Authority (PHEAA).

 

“As Deputy Chief Counsel for the Pennsylvania Higher Education Assistance Authority (PHEAA), you were responsible for the company’s compliance with federal and state law.[1] During your tenure, however, PHEAA had a poor compliance record, as reflected in the number of borrower complaints and allegations of violations of federal and state consumer protection law,” the Senators wrote

 

“We want to provide you with an opportunity to address our concerns about your record, as well as your views on your role, your priorities, and how you plan to carry out your statutory duties as Student Loan Ombudsman,” wrote the Senators

 

In July, the Senators sent a letter to Department of Education Secretary Betsy DeVos and CFPB Director Kathleen Kraninger demanding answers for why the Department and the Bureau stopped coordinating with each other to protect students from predatory student loan companies.

 

The full text of the letter is below and the PDF can be found HERE

 

August 29, 2019

 

Mr. Robert Cameron

Student Loan Ombudsman

Consumer Financial Protection Bureau

1700 G Street, NW

Washington, DC 20552

 

Dear Mr. Cameron,

 

We write regarding your recent appointment to serve as the Consumer Financial Protection Bureau’s (CFPB) Student Loan Ombudsman. We have concerns about the potential conflicts of interest associated with your appointment based on your prior work on behalf of the industry you will now monitor and oversee, including your work for a student loan servicer with a troubling legal and regulatory history.

 

As Deputy Chief Counsel for the Pennsylvania Higher Education Assistance Authority (PHEAA), you were responsible for the company’s compliance with federal and state law.[2] During your tenure, however, PHEAA had a poor compliance record, as reflected in the number of borrower complaints and allegations of violations of federal and state consumer protection law. In 2017, the previous CFPB Student Loan Ombudsman issued a report finding that PHEAA had the second highest number of complaints submitted by student loan borrowers of any federal loan servicer.[3] In a 2018 report, the Government Accountability Office (GAO) found that PHEAA improperly denied student loan borrowers for Public Service Loan Forgiveness (PSLF) because of the company’s inability to properly account for qualifying payments and reliance on inaccurate guidance documentation.[4]

 

Earlier this year, the U.S. Department of Education’s Inspector General found that PHEAA had a “pattern of noncompliance” and was among the worst performing of the federal student loan servicers.[5] PHEAA has also faced allegations of improperly steering borrowers into more costly forbearance and deferment options instead of income-driven repayment plans, and mismanaging PSLF, potentially preventing thousands of teachers, nurses, police officers, military servicemembers, and other public servants from receiving the loan forgiveness they had earned.[6]

It is not clear what role, if any, you may have played in helping PHEAA to avoid legal or regulatory scrutiny associated with these allegations and findings of misconduct and poor performance, or what your involvement has been in ongoing litigation against PHEAA by states and student loan borrowers.

 

We want to provide you with an opportunity to address our concerns about your record, as well as your views on your role, your priorities, and how you plan to carry out your statutory duties as Student Loan Ombudsman. We therefore request that you provide a briefing to staff from the Senate Committee on Banking, Housing, and Urban Affairs and the Senate Committee on Health, Education, Labor, and Pensions regarding these issues no later than September 18, 2019. We look forward to hearing from you.

 

Sincerely,

 

 

 

 

 

 

 

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