ELIZABETH WARREN UNITED STATES SENATE WASHINGTON, DC 20510-2105 p 202 274 4&43 MASSACHUSETTS COMM nHS BANKING, HOUSING. AND URBAN AFFAIRS HEALTH EDUCATION, LABOR, AND PENSIONS tinitcd ~rotes ~mate 2400 JFK FEDERAL BUILDING 15 NEW SUDBURY STREET BOSTON MA 02203 p 6ff 565 3170 ARMED SERVICES 1550 MAIN STREET SUITE406 SPRINGFIELD, MA 01103 P; 413-788 2690 SPECIAL COMMITIEE ON AGING August 22, 2019 www warren .senate.gov The Honorable Kathy Kraninger Director Consumer Financial Protection Bureau 1700 G Street N W Washington, DC 20552 Dear Director Kraninger: I wri te to express my alarm regarding the announcement of Robert Cameron's appointment to be the Student Loan Ombudsman of the Consumer Financial Protection Bureau (CFPB), and to ask that you reconsider this decision. The appointment of Mr. Cameron, a former executive responsible for compliance at a student loan servicer that has been accused of cheating thousands of students and taxpayers, is an outrageous slap in the face to student loan borrowers across the country. Given Mr. Cameron 's record overseeing compliance for an industry player frequently ci ted for fa ilure to comply with federal rules and state consumer protection laws, he is not qualified to serve as the Student Loan Ombudsman, and I urge you to reconsider this appointment. The CFPB's Student Loan Ombudsman is responsible for helping borrowers resolve issues with the student loan industry. Nearly forty-five million student loan borrowers deserve the strongest advocate in the CFPB's Student Loan Ombudsman. Yet, Mr. Cameron comes to this rol e straight through the revolving door, directly from his position overseeing "compliance activities" at the Pennsylvania Higher Education Assistance Authority (PHEAA}-one of the U.S. Department of Education's largest student loan servicers, and one of its most troubled. As you are sure ly aware, PHEAA 's compliance track record has been utterly abysmal under Mr. Cameron's watch. T he most recent report released by the former CFPB Student Loan Ombudsman found PHEAA and its private loan-servicing unit, American Educations Services, received at least 1,500 complaints in a single year, accounti ng for 15% of all federal student loan complaints submitted to the agency. 1 A separate 201 7 CFPB investigation uncovered how " flawed payment processing, botched paperwork and inaccurate information" from PHEAA prevented hundreds of public service workers from receiving their earned loan forgiveness. 2 More recently, a U.S. Department of Education Inspector General report identified "a pattern of 1 Consumer Financial Protection Bureau, "Annual report of the CFPB Student Loan Ombudsman," October 20 17, https://li les.consumerfinance.gov/f/documents/clf.!b annual-report student-loan-ombudsman 2017 .pdf. 2 Consumer Financial Protection Bureau, "Staying on track while giving back," June 2017, hnps://li les.consumerfinance.g,ov/ f/documents/201706 cfpb PSLF-midyear-report.pdf; Washington Post, "Watchdog agency blasts government contractor for mishandling student loan forgiveness program," Danielle Douglas-Gabriel, June 22, 20 17, https://www.washingtonpost.com/news/grade-ooint/wp/20 17/06/22/watchdogagency-b lasts-government-contractor-for-m ishand Iing-student-loan-forgivencss-program/. noncompliance at PHEAA" where the servicer's representatives were failing to provide borrowers with sufficient information about available repayment options. 3 The CFPB is statutorily mandated to protect student loan borrowers from unfair, deceptive, and abusive acts committed by the student loan industry, including PHEAA and the rest of the Education Department's student loan servicers and contractors. 4 PHEAA has a record of failing borrowers. It is mind boggling that the CFPB's top official responsible for overseeing this servicer's compliance activities is now tasked with protecting borrowers from mistreatment by PHEAA and other student loan companies and servicers. I have introduced sweepi ng ethics legislation, the Anti-Corruption and Public Integrity Act, which would slam shut the revolving door, ban corporate executives whose companies were caught breaking federal law from working in the federal government, and require most fede ral officials to recuse themselves from any deci sions that affect their former employer for at least four years. I intend to keep working to make that plan law. In the meantime, I implore you to replace Mr. Cameron with someone with a proven track record of consumer advocacy, not an industry insider. Sincerely, 3 United States Department of Education Office of Inspector General, " Re issuance of Final Audit Report, 'Federal Student Aid: Additional Actions Needed ro Mitigate the Risk of Servicer Noncompliance with Requirements for Servicing Federally Held Student Loans,"' March 5, 2019, https://www2.ed.gov/about/officcs/list/oig/auditrepo11s/fy20 I 9/a05g0008.pdf. 4 12 U.S.C. 548 l(I5)(A); 12 U.S.C 55 14(a)(I)(B); 12 CFR Part 1090.105; 12 CFR Part 1090.106. 2