CFPB Assistant Director Resigns, Accuses Bureau of Abandoning Consumers

In a letter sent today to CFPB Acting Director Mick Mulvaney, Seth Frotman, who has served at the Bureau for the past seven years, tendered his resignation, writing that “after 10 months under your leadership, it has become clear that consumers no longer have a strong, independent Consumer Bureau on their side.” Frotman was most recently Assistant Director for the Office for Students and Young Consumers and Student Loan Ombudsman, a position that he was appointed to by then-Director Richard Cordray in April 2016.

According to the press release announcing his appointment to the Ombudsman role, Frotman originally joined the Bureau as part of the Treasury Implementation Team in 2011 as senior advisor to Holly Petraeus, the Assistant Director for the Office of Servicemember Affairs. Section 1035 of the Dodd-Frank Act, which created the CFPB, establishes a Student Loan Ombudsman at the Bureau to “provide timely assistance to borrowers,” “compile and analyze borrower complaints,” and “make appropriate recommendations to the Director [of the CFPB], the Secretary [of the Treasury], the Secretary of Education,” and the relevant committees in both the House and Senate.

In his resignation letter, Frotman wrote that “the current actions being taken by Bureau leadership are hurting families,” saying that the current leadership has “abandoned its duty to fairly and robustly enforce the law,” “protected the misguided goals of the Trump Administration to the detriment of student loan borrowers,” and “turned its back on young people and their financial futures.”

He says that after hearing directly from tens of thousands of individual student loan borrowers, “a common thread ties these experiences together – the American Dream under siege, told through the heart wrenching stories of individuals caught in a system rigged to favor the most powerful financial interests. For seven years, the Consumer Financial Protection Bureau fought to ensure these families received a fair shake as they strived for the American Dream.”

“Sadly,” he continued, “the damage you have done to the Bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country.”

Frotman’s resignation is effective September 1.