A recent internal memo from the CFPB, under new leadership, indicates a strategic pivot away from supervising student loans and medical debt. The bureau will prioritize consumer protection for military families and veterans while shifting its focus towards tangible threats. This memo arrives as many student-loan borrowers are expected to default, raising concerns about the CFPB's reduced oversight during a financially challenging period. The change in priorities emphasizes a broader shift in the agency's approach to consumer financial protection under the current administration.
In the face of this unprecedented financial catastrophe, CFPB has given the student loan industry advanced notice that it will not be watching out for borrowers and it will not hold companies accountable when they default.
The Bureau will focus on its enforcement and supervision resources on pressing threats to consumers, particularly service members and their families, and veterans.
To focus on tangible harms to consumers, the Bureau will shift resources from enforcement and supervision that can be done by the States.
Paoletta wrote that moving forward, the CFPB will 'deprioritize' areas including oversight over student loans, medical debt, consumer data, and digital payments.
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