This month, the Consumer Financial Protection Bureau and the Department of Education entered into a Memorandum of Understanding intended to enhance their level of collaboration with respect to complaints and concerns raised by student loan consumers.
The agreement provides that the two federal agencies will, to the extent permitted by privacy laws, share consumer complaint information and meet on a regular basis to consider the substance of the complaints.
It also defines their respective responsibilities for consumer complaints, to avoid overlap. For example, complaints related to the origination of federal student loans will be referred to the Department of Education, whereas complaints about private student loans and loan servicing will be directed to the CFPB.
The CFPB also is developing technology to share its complaint analytical tools with the Department of Education, so that the Department will have access to all complaints that involve a federal student loan.
The Memorandum of Understanding is a renewed effort at collaboration between two federal agencies with a rocky history and significant subject matter overlap. In 2017, United States Secretary of Education Betsy DeVos publicly criticized the CFPB for overreaching beyond its intended scope and refused to continue sharing certain information with the CFPB. The CFPB has, in turn, complained that this lack of information from the Department inhibits its ability to regulate and investigate student loan servicers.
This recent Memorandum of Understanding also comes only a few days after two Democratic senators publicly criticized the CFPB director, contending that the agency was delinquent in its duty to oversee student loan servicers due to a “failure to stand up to Secretary DeVos.” It remains to be seen whether the recent Memorandum of Understanding will mollify vocal critics of both agencies and their handling of student loan complaints.