According to media reports, CFPB Acting Director Mick Mulvaney has sent an email to Bureau staff indicating that he plans to fold the Office of Students and Young Consumers into the Office of Financial Education. Both Offices are part of the Bureau’s Consumer Education and Engagement Division. The Student Loan Ombudsman, a position created by the Dodd-Frank Act, will also be part of the Office of Financial Education. The current staff of the Office of Students and Young Consumers is expected to be reassigned to other Offices.
While the reorganization means that the Office of Students and Young Consumers will no longer be involved in investigations that could result either in supervisory actions or in enforcement actions, it does not mean that the CFPB will no longer bring such actions against student loan lenders and servicers.
As might be expected, the reorganization has quickly attracted criticism from consumer advocates and others. New York State Department of Financial Services Superintendent Maria Vullo released a statement expressing her Department’s concern “with the CFPB’s troubling decision to minimize the role of the Office of Students and Young Consumers.” She indicated that “DFS’s Student Protection Unit will continue its nation leading efforts in safeguarding students from fraud and misrepresentation in the market, monitoring student-related financial practices in New York and educating student consumers and their families regarding available financial products and services to empower them to make informed choices. And violators of the law will be met with swift DFS response.”
In February 2018, Mr. Mulvaney announced that he planned to transfer the CFPB’s Office of Fair Lending from the Supervision, Enforcement, and Fair Lending Division to the Director’s Office, where it will become part of the Office of Equal Opportunity and Fairness.
Mr. Mulvaney is also reported to have indicated in his email to Bureau staff that he plans to hire more political appointees and create an office of cost-benefit analysis staffed by economists that report directly to him. Another reported change is Mr. Mulvaney’s creation of an Office of Innovation, known previously as Project Catalyst, an initiative launched by the CFPB in 2012 for facilitating innovation in consumer financial products and services.