Removing Barriers Blog

Department of Education Ends Information Sharing Agreement with CFPB
Posted September 07,2017 by ManojBhoi

Last week, Kathleen Smith, Acting Assistant Secretary of the Office of Postsecondary Education, wrote to Director Cordray of the Consumer Financial Protection Bureau (CFPB) to terminate the Memoranda of Understanding (MOU) between the Department of Education and the CFPB regarding the sharing of information in connection with oversight of federal student loans. 

The purpose of the MOU was to allow the agencies to collaborate on providing assistance and serving borrowers to resolve complaints related to their student loans.  According to the letter, the collaboration is not two sided and has led to confusion and conflicting guidance to both borrowers and servicers.   

Acting Secretary Smith stated, “The Department’s mission is to serve students and borrowers, but the CFPB’s actions have undermined the mission by violating the intent of the MOU.  As you know, in the Sharing MOU the CFPB agreed to direct to the Department all complaints related to Title IV federal student loans within 10 days of receipt by the CFPB.  However, the CFPB has failed to direct such complaints to the Department and has instead handled such complaints itself.”    

The MOU between the CFPB and Department of Education will terminate 30 days from August 31, 2017 and the Department of Education will have full oversight responsibility for federal student loans.