CBA Statement on CFPB Education Loan Ombudsman
CBA Statement on CFPB Education Loan Ombudsman
WASHINGTON – Consumer Bankers Association President and CEO Richard Hunt issued the following statement after the Consumer Financial Protection Bureau announced the appointment Robert G. Cameron as its new Private Education Loan Ombudsman:
“We are glad Director Kraninger has filled this role and believe it should remain separate from the Office of Students.
“Through responsible lending practices and a 98 percent repayment rate, private student loans set students up for success. We believe there is a role for the federal government to help families most in need, but the current system has led to increased tuitions and double-digit default rates. While the CFPB notes Mr. Cameron’s title is Private Education Loan Ombudsman, it is clear the federal student loan program is not working and he should also focus on implementing needed improvements there.
“CBA looks forward to working with Mr. Cameron to help improve the student lending marketplace to benefit all borrowers.”
NOTE: For several years, the CFPB Student Loan Ombudsman also led the Office of Students. These are incompatible roles as they create a conflict of interest. An ombudsman should be impartial and serve in a confidential capacity, while a division head at the agency is a policy maker, enacting rules or recommending enforcement by the agency. CBA strongly recommends the Bureau separate the positions.
To learn more about CBA’s work to improve the student loan marketplace, please visitConsumerBankers.com/EducationFunding.
CBA’s specific recommendations to Congress include:
- Increasing the availability of Pell Grants;
- Ending unlimited PLUS loan borrowing to help reduce tuition increases;
- Implementing “Know Before You Owe” disclosures to clearly explain the terms of federal loans;
- Renaming so-called “Award” letters provided by colleges to the more accurate “Financing” letters and having them clearly differentiate loans from grants and scholarships;
- Requiring school certification of private education loans;
- Utilizing economist-preferred fair value accounting to show the true cost of federal student loans; and
- Requiring detailed public reports on the performance of the federal government’s direct loan portfolio.
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About the Consumer Bankers Association:
The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.
