November 18, 2019

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Democratic lawmakers press Kraninger and DeVos for new CFPB/ED MOU

Two Democratic Senators have sent a letter to CFPB Director Kraninger and Education Secretary DeVos asking the regulators to explain what roadblocks are preventing the CFPB and ED from entering into a new memorandum of understanding to replace the MOU between the agencies that the ED terminated in 2017.

In their letter, the Senators indicated that the agencies have disagreed about the reason for the MOU’s termination and have provided conflicting information to Congress regarding the CFPB’s efforts to reestablish the MOU.  With regard to why the MOU was terminated, the Senators referenced written responses submitted by an ED representative for the record of a Senate hearing.  In the responses, the ED indicated that the primary reason for the termination was that the CFPB stopped sending complaints about federal student loans to the ED.  The Senators cited statements from former Director Cordray and Director Kraninger that were inconsistent with the ED’s claim that the CFPB was not sending complaints to the ED.

With regard to the CFPB’s efforts to reestablish the MOU, the Senators referenced a letter sent by Director Kraninger to Senator Elizabeth Warren in April 2019 in which Director Kraninger noted that the Bureau is statutorily mandated to have an MOU with the ED and called it “a priority for us at the Bureau to make progress on a new MOU.”  They once again referenced the written responses submitted by an ED representative for the record of a Senate hearing to show conflicting information from the ED, specifically the ED’s statement that the CFPB had not formally attempted to reestablish an MOU.

The Senators asked the CFPB and ED to provide a written explanation of: the basis for the MOU’s termination; whether there has been an attempt to reestablish the MOU; what issues still need to be resolved to reestablish the MOU; and an expected timeline for reestablishing the MOU.  The Senators strongly encouraged the agencies “to reestablish the MOU immediately.”

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About this Author

Barbara S. Mishkin, Ballard Spahr, Philadelphia, Deceptive Practices Lawyer, Fair Debt Collection Practices Act, Gramm Leach Bliley
Of Counsel

Barbara Mishkin focuses on consumer compliance and banking law. The federal laws with which Ms. Mishkin has dealt extensively include the Truth in Lending Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and Gramm-Leach-Bliley Act. She also has significant experience with state usury and lender licensing laws, as well as state laws prohibiting unfair and deceptive acts and practices.

American Bar Association, member, Consumer Financial Services Committee;...

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