A striking phenomenon of the Trump era is how the president’s daily elation and Twitter fury can eclipse the way his administration is cheating on people.
Last Friday, the Consumer Financial Protection Bureau announced that it had finally appointed a new student loans ombudsperson. Mandated by law, the ombudsman acts as a resource person for borrowers in conflict with their private lenders; The job also involves analyzing data on student loans to advise the CFPB chief, the Secretary of the Treasury and Congress on how to improve the often hellish and hellish experience of obtaining student loans.
The last student loans ombudsperson, a holdover from the Obama era named Seth Frotman, resigned last year in a bureaucratic soaring glory, asserting that the Bureau had “turned your back” on borrowers and service members. After nearly a year of research, Kathy Kraninger, the Trump administration’s choice to lead the CFPB, has unveiled perhaps the most Trumpian choice possible to replace Frotman.
The new student loan mediator is Robert Cameron, who comes to the office of a scandal-ridden loan department called the Pennsylvania Higher Education Assistance Agency, better known as PHEAA. That is, he joined the board from a high level in the very industry that he is now supposed to oversee and help regulate.
Frotman, the former ombudsman, lambasted the CFPB’s decision to appoint Cameron. “It is outrageous that an executive in the student loan company who has deceived students and taxpayers, and who has been at the center of all the big industry scandals over the past decade, is now charged with protecting rights of borrowers, “he said in a statement. “It is an insult to the 45 million borrowers in the country who deserve a lawyer in their corner.”
Senator Elizabeth Warren (D-MA) criticized the decision on Twitter, noting that Cameron’s former employer, PHEAA, had been the subject of more than 9,000 borrower complaints.
“The CFPB student loans ombudsman is supposed to protect students from fraud,” she wrote on Twitter. “But the Trump administration’s choice for the job is an executive in a student loans department that has received more than 9,000 complaints from borrowers. In my administration, the CFPB will work for the people.
As legal experts and student loan advocates point out, the PHEAA is often cited as one of the worst offenders when it comes to alleged mistreatment and wrongdoing by student loan providers, the middlemen who send the loans. invoices and process payments. In 2017, Massachusetts Attorney General Maura Healey for follow-up PHEAA for a range of alleged offenses: harming students who participated in the federal public service loan forgiveness program, overcharging student borrowers, and mismanaging the process for borrowers to adjust their loan payments based on their income. The complaint said that the PHEAA “was aware of these problems but failed to correct them”.
The PHEAA’s attempt to derail the trial was almost as infuriating as the allegations themselves. The company argued that as quasi-state institution based in Pennsylvania, it enjoyed sovereign immunity and could not be sued in Massachusetts. In other words, the PHEAA argued that it was indeed above the laws of Massachusetts, even though it had many customers. Unsurprisingly, a judge beaten down this argument and allowed the case to move forward. (The company largely denied the allegations in the Massachusetts lawsuit.)
This wasn’t the first time the duty officer had come up with this, uh, new legal argument. The PHEAA has argued in court that its unique structure means that it is also not covered by federal whistleblower protections, say, and fair credit laws.
According to the CFPB Press releaseRobert Cameron, the new student loans ombudsman, worked directly on the legal maneuvers of the PHEAA. Here’s how the Bureau describes its old job:
While at the Pennsylvania Higher Education Assistance Agency, Mr. Cameron led a team of attorneys and other staff and oversaw the agency’s compliance activities. He was also responsible for ensuring the Pennsylvania Higher Education Aid Agency’s compliance with numerous federal and state laws, including the Dodd-Frank Act. Mr. Cameron has also worked in the Pennsylvania Department of the Treasury and the Governor’s Office of the Legal Counsel.
When the Trump administration goes to the trouble of appointing anyone to his many vacancies, they are often people hired for regulate and interact with the very industries they just left. Think about the revolving door on steroids. Cameron’s appointment is just the latest in this vein.
It does not drain the swamp. It is precisely the opposite.
After this story was published, CFPB sent Rolling stone a statement from Cameron that did not specifically address his tenure at PHEAA: “As a dedicated public servant, including my civilian and military background as well as my experience in the PA Treasury and the Office of the Adviser General to the Governor of the Palestinian Authority, drafting regulations and implementing and enforcing a myriad of laws and regulations, I am convinced that I can contribute to the fulfillment of the mission of the private student loan ombudsman. In all of my work, my commitment has always been to serve the American people and I look forward to continuing this mission in the Office.