As the student loan ombudsman for the Consumer Financial Protection Bureau, Seth Frotman watched as the Department of Education became one of the biggest banks in the country. It has lent out more than a trillion dollars to student borrowers. The problem is, the Department of Education wasn't really built to be a bank.
So, the department called in some backup to help with the paperwork. Now, student loan servicers help the Education Department deal with borrowers.
And normally the Consumer Financial Protection Bureau regulates banks, and servicers, and loans. But there's a new director in town, and he doesn't seem interested in regulating much. And that made Seth Frotman mad enough to quit, and tell all.