Washington D.C. — Politico reported on May 22 : “Payday lenders have reached a tentative settlement with the FDIC and the Office of the Comptroller of the Currency to end their years long legal battle over whether bank regulators acted inappropriately in connection with an Obama-era program known as “Operation Choke Point.” […] Operation Choke Point, officially described as an effort to cut off the banking system from wrongdoing by merchants, was apparently ended under President Donald Trump.”
In response, Allied Progress Director Derek Martin made the following statement:
“Operation Choke Point was designed to investigate unlawful behavior based on evidence consumers were being defrauded. The fact that the payday lending industry spent so much time and energy opposing such an idea should speak volumes about how they operate and what kind of behavior they engage in. The only reason they’re settling this suit now is they know Donald Trump has their backs after they poured $2.5 million into his campaign and inauguration activities.”
- Operation Choke Point investigated specific unlawful conduct based on evidence that consumers are being defrauded. “Stuart Delery, assistant attorney general for the Justice Department’s civil division, told lawmakers that the department’s ‘policy is to investigate specific unlawful conduct based on evidence that consumers are being defrauded, not to target whole industries or businesses acting lawfully.'” [Danielle Douglas, “Republicans to Justice Dept.: Stop targeting legal businesses in ‘Operation Choke Point,'” The Washington Post, 07/18/14]
- Operation Choke Point Simply Heightened Scrutiny On Banks That Failed To Raise Concerns About “Questionable Transactions On Their Networks.” It Was Already The Banks’ Responsibility To Flag These Transactions. “The idea behind Operation Choke Point, initiated in 2013, was to prevent consumer fraud by limiting access to the financial system. Any transaction that requires a deduction from a bank account has to go through what’s called the Automatic Clearing House. Only banks with access to the payment system can facilitate those transactions. Banks, of course, have certain responsibilities to flag suspicious activity, under the Bank Secrecy Act and anti-money laundering statutes. Banks must identify that their customer is legitimate, to ensure that they’re not implicated in a fraud scheme. So Operation Choke Point heightened scrutiny on banks who failed to raise concerns about questionable transactions on their networks. In presentations to banks, regulators and law enforcement highlighted business transactions with high rates of customer disputes. It was already the bank’s responsibility to report these; DOJ was just warning banks to be vigilant.” [David Dayen, “MORE TRUMP POPULISM: DOJ SHUTS DOWN AN OPERATION THAT WAS SUCCESSFULLY COMBATING CONSUMER FRAUD,” The Intercept, 08/18/17]
- In 2017, the Trump Justice Department “committed to ending” Operation Choke Point.“The Justice Department has committed to ending a controversial Obama-era program that discourages banks from doing business with a range of companies, frompayday lenders to gun retailers.” [Victoria Guida, “Justice Department to end Obama-era ‘Operation Choke Point,’” Politico, 08/17/17]
Allied Progress and American Oversight Go to Court Against CFPB on Heels of Troubling Report that CFPB Has Ceased Fair Lending Enforcement Actions
WASHINGTON, D.C. – Ahead of CFPB Director Kathy Kraninger’s appearance before the House Financial Services Committee this week, consumer advocacy group Allied Progress, represented by American Oversight, filed a Freedom of Information Act (FOIA) lawsuit against the CFPB seeking information that would shed light on why Eric Blankenstein remains a Policy Associate Director at the CFPB despite the fireable revelations in September 2018 that Blankenstein authored numerous racist and sexist blog posts as early as 2004 and as recently as 2016.
In early October, Allied Progress filed five FOIA requests with the CFPB requesting email correspondence from numerous bureau officials, including Eric Blankenstein, in the days following the Washington Post’s report that Blankenstein had published a blog under a pen name where he expressed racist and sexist views. Allied Progress’ requests included emails related to an all-staff email sent by Patrice Ficklin, the Assistant Director of Fair Lending & Equal Opportunity, who publicly withdrew her initial statement of support for Blankenstein, requested on deadline by Blankenstein himself, and then voiced concerns about his ability to enforce fair lending after reading his troubling blog posts. Despite multiple attempts by Allied Progress to contact the CFPB by phone and email to discuss the five FOIA requests, the CFPB has failed to provide any of the requested documents.
The lawsuit comes just days after the U.S. House Financial Services Subcommittee on Diversity and Inclusion held a hearing on “Diversity Trends in the Financial Services Industry.” It also follows the CFPB’s Fall 2018 Semi-Annual Report to Congress that acknowledged the agency did not file a single fair lending public enforcement action from the time of former Director Richard Cordray’s departure in November 2017 through September 30, 2018 and that the Bureau chose to not initiate or refer any matters to the Department of Justice related to discrimination, despite the Bureau receiving approximately 329,000 complaints from April 1 — September 30, 2018.
“The CFPB is tasked with protecting consumers from financial predators, not protecting officials from accountability for racism. The public has a right to know how much time and effort senior Trump administration officials, including Mick Mulvaney, spent shielding Blankenstein and keeping him in his job,” said Austin Evers, Executive Director of American Oversight.
“This cannot be allowed to become just another Trump administration scandal,” said Kyle Herrig, senior advisor to Allied Progress. “There is simply too much at stake to accept that someone who holds racist views – views Blankenstein tellingly never apologized for – is currently overseeing, with cruel irony, the CFPB’s efforts enforce consumer protection laws for ALL Americans. Current Director Kathy Kraninger has never weighed in publicly about the controversy, but we hope this lawsuit will change that.”
Eric Blankenstein should have been fired immediately last September. But then-Acting CFPB Director Mick Mulvaney kept his handpicked lieutenant in place in the face of internal revolt from CFPB staff and demands for Blankenstein’s ouster from a chorus of consumer advocacy and civil rights groups and members of Congress. The public deserves to know how and why this decision was made. The man who was hired to oversee CFPB’s fair lending enforcement has lost all public trust that he can ensure that African Americans and other minorities will receive fair, non-discriminatory access to credit in light of his history of trafficking in hate as recently as a few years ago. This is especially concerning after Mulvaney gutted the CFPB’s enforcement powers and made it easier for lending discrimination to take place — policies which Kraninger has carried on with a smile.
Added Herrig: “As long as Blankenstein continues to draw a hefty taxpayer salary, consumers are left to assume that Kathy Kraninger either doesn’t care about his views, or worse, approves of a racist overseeing lending discrimination matters in her agency. But based on the recent CFPB report, it’s clear the Trump administration hasn’t cared about consumers being exploited for some time now.”
Allied Progress is a consumer watchdog organization that uses hard-hitting research and creative campaigns to hold Wall Street special interests and their allies in Congress and the White House accountable.
American Oversight is a non-partisan, nonprofit ethics watchdog and is the top Freedom of Information Act litigator investigating the Trump administration. American Oversight has filed more than 60 public records lawsuits since March 2017, uncovering and publishing tens of thousands of documents including senior officials’ calendars, emails, and expense records.
WHAT YOU NEED TO KNOW:
In September, The Washington Post Reported On Eric Blankenstein’s Blog Posts From Years Earlier, In Which He Questioned If Using The N-Word Was Racist And Claimed That The Majority Of Hate Crimes Were Hoaxes.
On September 26, The Washington PostReported That Eric Blankenstein, The Political Appointee Responsible For Enforcing Fair Lending Laws At The CFPB, Had Written Blog Posts Under A Pen Name In Which He Questioned “If Using The N-Word Was Inherently Racist And Claimed That The Great Majority Of Hate Crimes Were Hoaxes.” “A senior Trump appointee responsible for enforcing laws against financial discrimination once questioned in blog posts written under a pen name if using the n-word was inherently racist and claimed that the great majority of hate crimes were hoaxes. Eric Blankenstein, a policy director at the Consumer Financial Protection Bureau, expressed those and other controversial views more than a decade ago on a political blog he co-authored with two other anonymous contributors.” [Robert O’Harrow Jr., Renae Merle and Shawn Boburg, “Trump anti-discrimination official once called most hate crimes hoaxes,” The Washington Post, 09/26/18]
Eric Blankenstein’s Blog Contained Numerous Racist And Sexist Comments, Including Suggesting That Using The N-Word Isn’t Racist And That Most Hate Crimes Are “Hoaxes.”
Blankenstein Implied That Calling Someone The N-Word Didn’t Make Them A Racist, But Rather It Made Them An “‘Asshole.’”In a blog post discussing hate crime policies at the University of Virginia, Eric Blankenstein questioned whether or not calling someone “‘nigger’” in fact makes someone “‘racist, or just assholes looking for the most convenient way to get under [someone’s] skin?’” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04]
Blankenstein Claimed That “Hate-Crime Hoaxes Are About Three Times As Prevalent As Actual Hate Crimes.”In a blog post discussing hate crime policies at the University of Virginia, Eric Blankenstein wrote that most hate crimes “‘are in fact hoaxes,’” adding “hate-crime hoaxes are about three times as prevalent as actual hate crimes.” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04]
Blankenstein Suggested That Because Many Hate Crimes Are “Hoaxes,” They Should Not Necessarily Be Governed Under UVA’s Strict “Honor System” Until “A Hood Wearing KKK Member Is Caught.”In response to the notion that a hate crime should fall under UVA’s “honor system… [which] employs the single sanction of expulsion to uphold the highest standard of academic integrity at the University,” Eric Blankenstein asked, given the severity of the punishment, “why should the University be taking any action until it is proven?” He went on to say, “Until a hood wearing KKK member is caught, why should the honor system be changed?” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04 and Lauren Todd Pappa, “U. Virginia divided over sanction,” Cavalier Daily, 11/17/04]
Blankenstein Associated “Racial Idiocy” with University of Virginia’s Dean Of African American Affairs and President of the Albemarle-Charlottesville NAACP. On September 30, 2004, a conversation involving Eric Blankenstein was posted on his blog “Two Guys Chatting.” Blankenstein appeared to initiate the conversation, saying “So, there is more racial idiocy at UVa.” His conversation partner responded, “well, it’s can’t be any worse than the African City in Detroit,” to which Blankenstein said, “Well, Dean Turner is involved, so you never know.” Blankenstein then said, “Go to www.discriminations.us and read the first post.” [“Hate Crimes vs. Crimes,” Two Guys Chatting, 09/30/04]
Blankenstein Appeared To Blame A Woman’s Right To Choose As The Reason For A Pregnant Woman Being Murdered.Eric Blankenstein implied that abortion laws were partially to blame for a case where a man murdered the mother of his child to avoid paying child support. Blankenstein discussed the case in the context of how women can “dissaociate” themselves from a pregnancy via abortion, but men cannot. Blankenstein implied that the murder case he discussed was a consequence of that imbalance. [“Another question….,” Two Guys Chatting, 12/19/04]
Blankenstein Thinks Abortions And Abandoning Children In Dumpsters Are The Same Thing. Eric Blankenstein claimed that having an abortion is the same as having a “child in an alley and [leaving] it in a garbage dumpster. [“Party Inclusiveness/Abortion,” Two Guys Chatting, 09/10/04]
Blankenstein Lamented That Women Can “‘[Fuck] Someone [They] Shouldn’t Have’”And Use Abortion To “‘Get Rid Of The Problem’” When Men Can’t. In a blog post, Eric Blankenstein lamented that women can get an abortion when they “fuck someone [they] shouldn’t have” to “get rid of the problem,” but men don’t have the same right. [“Party Inclusiveness/Abortion,” Two Guys Chatting, 09/10/04]
Eric Blankenstein Faced “Open Rebellion” In The CFPB’s Fair Lending Office After Reports Of His Blog Surfaced.
Eric Blankenstein “Faced Open Rebellion From Subordinates” After Reports Of His Racially Charged Blog Posts Came To Light. “A senior Trump appointee at an agency responsible for enforcing laws against financial discrimination faced open rebellion from subordinates Friday over blog posts he wrote years ago expressing controversial views on the n-word and hate crimes, according to internal emails obtained by The Washington Post. The uproar came as two Democrats on the Senate Banking Committee and a national housing rights organization called for the departure of the appointee, Eric Blankenstein, a policy director at the Consumer Financial Protection Bureau. The upheaval was triggered by a mass email from a senior civil servant who harshly criticized the writings, which The Post revealed and linked to Blankenstein in a report Wednesday. Writing under a pen name in 2004, Blankenstein questioned whether the n-word was inherently racist and claimed that the great majority of hate crimes were hoaxes.” [Robert O’Harrow Jr., Renae Merle and Shawn Boburg, “Trump anti-discrimination official faces rebellion at agency over racially tinged blog posts,” The Washington Post, 09/28/18]
Fair Lending Head Patrice Ficklin Withdrew Her Initial Support Of Blankenstein After Reading His Racially Charged Blog Posts—And Questioned His Ability To Enforce Fair Lending Policy.
Patrice Ficklin, The Head Of The CFPB’s Fair Lending Office, Initially Issued A Statement In Support Of Eric Blankenstein, But Said, In An Email To Staff Two Days Later, That “She Had Not Read The Blog Posts At The Time” And Had Pulled Her Support Of Blankenstein. “The head of the Consumer Financial Protection Bureau’s fair- lending office said Friday she has grave doubts about a proposed restructuring of her office after reading blog posts written more than a decade ago by a top agency aide. Patrice Ficklin, the director of the office, sent an email to staff on Friday afternoon saying she no longer supports Eric Blankenstein, the CFPB’s policy director for supervision, enforcement and fair lending. The Washington Post reported Wednesday that Blankenstein wrote in blogs 14 years ago that a majority of hate crimes were hoaxes and that using a racial slur did not necessarily make someone a racist. Ficklin initially was quoted by the Post supporting Blankenstein, but in her email Friday said she had not read the blog posts at the time and now has pulled her support.” [Kate Berry and Rachel Witkowski, “Top CFPB official yanks support for political appointee over past writings,” American Banker, 09/28/18]
- Ficklin Raised Concerns About Blankenstein’s Ability To Manage The CFPB’s Fair Lending Program In Light Of His Comments. “‘I have had experiences that have raised concerns that are now quite alarming in light of the content of his blog posts — experiences that call into question Eric’s ability and intent to carry out his and the Acting Director’s repeated yet unsubstantiated commitment to a continued strong fair lending program under governing legal precedent,’ she wrote in the email, a copy of which was obtained by American Banker.” [Kate Berry and Rachel Witkowski, “Top CFPB official yanks support for political appointee over past writings,” American Banker, 09/28/18]
CFPB Chief of Staff Kirsten Sutton Mork Tried To Interfere With Patrice Ficklin’s Email Publicly Pulling Her Support Of Eric Blankenstein. “On Friday, shortly after noon, Ficklin shared a copy of her planned email with Blankenstein and other political officials, saying she intended to send it to a wider group. At 1:38 p.m., Blankenstein wrote an email appealing to her to hold off. Minutes later, the bureau’s chief of staff, Kirsten Sutton, made her own appeal. ‘I am trying to reach you,’ Sutton wrote in an email to Ficklin. ‘Please do not send this until we’ve had the chance to connect.’ Seven minutes later, Ficklin notified Mulvaney and seven other top agency officials that she was proceeding.” [Robert O’Harrow Jr., Renae Merle and Shawn Boburg, “Trump anti-discrimination official faces rebellion at agency over racially tinged blog posts,” The Washington Post, 09/28/18]
Mulvaney Moved The Bureau’s Office of Fair Lending And Equal Opportunity Under His Direct Control…Weakening Its Authority.
In February 2018, Mick Mulvaney Moved The CFPB’s Office Of Fair Lending And Equal Opportunity Out Of The Bureau’s Enforcement Division And Under His Direct Control. “CFPB Acting Director Mulvaney, in a previously unreported move, said that he would be putting the Office of Fair Lending and Equal Opportunity, or OFLEO, under his direct control, startling consumer protection and civil rights advocates, and raising concerns that the office would be unable to carry out its mission — and that, indeed, that was the very purpose of the shift.” [David Dayen, “After Boasting About Lowering Black Unemployment, Donald Trump Undermines The Federal Unit Defending Against Housing Discrimination]
Senator Elizabeth Warren Warned About This Change When It Was First Announced, Arguing, “‘Mulvaney Is Putting the Office Of Fair Lending Under His Control So He Can Weaken It.’” Senator Elizabeth Warren (D-MA) “noted that the fair-lending office will now technically be under the ‘director’s office,’ along with Office of Equal Opportunity and Fairness, giving Mulvaney greater control. ‘Mulvaney is putting the Office of Fair Lending under his control so that he can weaken it — leaving neighborhoods and consumers across the country more vulnerable to bias,” Warren said in an emailed statement.” [Kate Berry, “CFPB’s Mulvaney strips his fair-lending office of enforcement powers,” American Banker, 02/01/18]
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Allied Progress and American Oversight Go to Court Against OMB and CFPB
WASHINGTON, D.C. – Today, consumer advocacy group Allied Progress, represented by American Oversight, filed a Freedom of Information Act (FOIA) lawsuit against the Office of Management and Budget (OMB) and the Consumer Financial Protection Bureau (CFPB), seeking information that would shed light on the record of CFPB Director nominee Kathy Kraninger.
The FOIA requests from Allied Progress sought employment documentation, travel and reimbursement information, calendars, and a variety of electronic communications for Ms. Kraninger. OMB and CFPB have failed to provide any of the requested documents, forcing Allied Progress to ask a federal court to order the agencies to release the records to the public.
“As we saw during last week’s confirmation hearing, Kathy Kraninger has no interest in letting the American people learn more about her record of mismanagement before Senators vote on her confirmation for CFPB Director. On issue after issue, from the Trump administration’s family separation immigration debacle to its disastrous response to the crisis in Puerto Rico following Hurricane Maria, Kraninger refused to answer even the most basic questions from Senators about her role in these policy blunders. If OMB and CFPB are going to stonewall the release of documents and information that could shed light on Kraninger’s record, we have no choice but to go to court,” said Karl Frisch, executive director of Allied Progress.
“It’s a huge red flag that the Trump administration is hiding Kathy Kraninger’s record from the public. From Scott Pruitt to Wilbur Ross, the Trump administration has a track record of appointing senior officials with significant ethical problems and conflicts of interest, and the public has a right to know what baggage Ms. Kraninger might be bringing to CFPB before the Senate votes on her confirmation,” said Austin Evers, executive director of American Oversight.
During Kraninger’s confirmation hearing in the Senate Banking Committee last week, Sen. Sherrod Brown (D-OH) noted that the White House has not responded to a letter from Committee Democrats requesting answers to various questions about Kraninger’s record.
Allied Progress is a consumer watchdog organization that uses hard-hitting research and creative campaigns to hold Wall Street special interests and their allies in Congress and the White House accountable.
American Oversight is a non-partisan, nonprofit ethics watchdog committed to holding the Trump administration accountable. Through public records requests and litigation, American Oversight identifies and extracts evidence of corruption, misconduct, or conflicts of interest in the administration.
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CLAIM: CFSA Says the CFPB “Ignored the Input of Small-Dollar Loan Customers” and Incorrectly Categorized Comments Supporting Lenders
REALITY: CFSA Orchestrated a Premeditated and Deliberate Attempt to Sabotage the CFPB, Now Defends Hundreds of Thousands of Bogus Comments
WASHINGTON, D.C. – Today, Community Financial Services Association of America (CFSA), the payday lending industry’s lead trade group, filed suit against the Consumer Financial Protection Bureau (CFPB) in an effort to block the bureau’s rule protecting consumers from the worst abuses of predatory short-term lenders. The CFSA’s lawsuit is based on a lie designed to cover up its premeditated and deliberate attempt to mislead and overwhelm the CFPB and stop the implementation of its new rule at any cost. From the CFSA’s press release announcing the lawsuit:
Throughout the rulemaking process and during the rule’s public comment period, the Bureau ignored the input of small-dollar loan customers. Serious concerns arose during the comment period over the inaccurate categorization of comment letters, and the questionable and inconsistent process through which the Bureau posted comment letters for public viewing as it rushed to finalize the rule. Questions also arose about whether the CFPB was appropriately reviewing and considering all public comments as required by the APA.
“Time and again the CFSA and the predatory lenders it represents have demonstrated why they simply cannot be trusted to deal honestly with the CFPB and the American people. They said they wanted to overwhelm the bureau with public comments to stop it from finalizing its payday lending rule and now they are defending the comments of hundreds of thousands of supposedly different individuals who used the exact same language and personal anecdotes in their comments defending the industry. The deception is breathtakingly transparent,” said Karl Frisch, executive director of Allied Progress.
He continued, “Mick Mulvaney has a responsibility to defend the CFPB from such baseless attacks. If he truly is not influenced by the tens of thousands of dollars he received in campaign cash from payday lenders belonging to this trade group, he will do the right thing and mount a vigorous defense of the bureau’s constitutionality and payday lending rule.”
The CFSA’s assertion that the CFPB ignored the comments of payday loan borrowers and incorrectly categorized comments that opposed the bureau’s tough rule is nonsense.
- REALITY: 40% of Comments Opposing the CFPB Payday Rule Weren’t Sent or Authorized by the People Associated with Them. A survey conducted by Mercury Analytics found that 40% of opposing the CFPB payday lending rule weren’t sent or authorized by the people who associated with them. “A survey conducted by Mercury Analytics for the Journal last year [in 2017] found that 40% of the comments in a batch of 13,000 comments opposing the CFPB rule weren’t actually sent or authorized by the people who associated with them.” [James V. Grimaldi, “Lawmaker Seeks Probe into Fake Comments on Payday-Lending Rule,” The Wall Street Journal, 02/05/18]
- REALITY: In Mere Minutes, Hundreds of Pro-Payday Consumer Testimonies Submitted to the CFPB Containing Identical Language Were Found. Allied Progress found that hundreds of positive consumer testimonials about payday loans sent to the CFPB contained identical language. [“Group Alleges Cut-And-Paste Job In CFPB Comments Favorable To Payday Loans,” Morning Consult, 09/26/16]
- REALITY: Payday Lending Used Misleading Rhetoric, Elements of Coercion, and “Scary Warnings” to Get Customers to Comment on the Payday Lending Rule.
Payday lenders used “high-pitched rhetoric and scary warnings” in to mobilize customers to file comments opposing the CFPB’s payday rules. “With high-pitched rhetoric and scary warnings, the payday lending industry is attempting to mobilize its borrowers to flood the CFPB with comments opposing the agency’s efforts to issue rules regulating the industry. Individual payday lenders, such as Advance America, are providing Internet links to trade group websites that make the process of commenting as simple as… well, taking out a payday loan.” [David Baumann, “Payday Lenders Mobilize Consumers With Dire Warnings,” Credit Union Times, 09/05/16]
Critics of the payday lending industry suggested “that the letter-writing involve[d] an element of coercion or pressure, directly or implied.” One consumer advocated “called it ‘disingenuous’ for the lenders to boast that the letters reflect the true opinions of the typical payday borrower.” “There’s nothing wrong with writing to the government, said David Rothstein, a former advocate for non-predatory resources at Neighborhood Housing Services of Greater Cleveland and now a principal at the Cities for Financial Empowerment Fund. That is, ‘as long as the customers and clients know what they’re writing about and what they’re asking for,’ he said. In this case, however, the payday lenders are ‘providing the pen and paper and, let’s not forget, providing the cash for the loan.’ This suggests that the letter-writing involves an element of coercion or pressure, directly or implied. Rothstein called it ‘disingenuous’ for the lenders to boast that the letters reflect the true opinions of the typical payday borrower.”[Stephen Koff, “Payday lenders get thousands of borrowers to complain to government about rules meant to protect them,” Cleveland.com, 08/22/16]
- REALITY: The Payday Industry Planned to Bombard the CFPB with Hundreds of Thousands of Comments to Bog Down the Agency and Delay the Payday Rule.
At its 2016 annual meeting, the Community Financial Services Association of America (CFSA) “plotted to bombard the” CFPB with “hundreds of thousands” of comments before the deadline on the payday rule. In March 2016, at the “annual meeting of the Community Financial Services Association of America (CFSA), the payday lending industry’s trade group,” “the industry plotted to bombard the Consumer Bureau with comments and studies suggesting regular people would be the real losers—even if their own oversized profits were obviously the focal point.” Payday industry “leaders stressed the need to deliver hundreds of thousands of such comments before the deadline on the payday rule, which is [October 7, 2016]. They suggested getting employees, landlords, suppliers, bankers, neighbors, state and local politicians, and even pastors to write letters.” [David Dayen, “How Predatory Payday Lenders Plot To Fight Government Regulation,” Vice News, 08/18/16]
At the same gathering, the existence of “a team of three full-time writers” that could assist with letter-writing was announced by a corporate defense firm. Tony Dias of corporate defense firm Jones Day “asked lenders to ‘get every customer that comes into your store… to write out a handwritten letter and tell the bureau why they use the product, how they use the product, and why this will be a detriment to their financial stability.'” Dias said his office would “‘have a team of three full-time writers'” to assist them. [David Dayen, “How Predatory Payday Lenders Plot To Fight Government Regulation,” Vice News, 08/18/16]
Dennis Shaul, CEO of the Community Financial Services Association of America (CFSA), said that one goal of getting customers to submit comments was to bog down the CFPB and delay the payday lending rule. Dennis Shaul, CEO of the Community Financial Services Association of America (CFSA), the payday lending industry’s trade group, said that, if the CFPB “has to wade through hundreds of thousands of comments—from homeowners to political officials and academics—to which they must respond, ‘then they are necessarily bogged down.'” He added, “‘If the rule is delayed, operators are still continuing to be in existence and presumptively to make a profit.'” [David Dayen, “How Predatory Payday Lenders Plot To Fight Government Regulation,” Vice News, 08/18/16]
- REALITY: The Majority of Payday Borrowers Feel Taken Advantage Of and Want More Industry Regulation. The Pew Charitable Trusts found that 55% of all payday borrowers feel that payday loans take advantage of borrowers and 72% of all payday borrowers favor more regulation of the payday industry. [“Payday Lending in America: How Borrowers Choose and Repay Payday Loans,” The Pew Charitable Trusts, February 2013]
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Bloomberg reported today that Mick Mulvaney’s CFPB is “dropping a lawsuit against a group of payday lenders” accused “of deceiving consumers and failing to disclose the true cost of the loans, which carried interest rates as high as 950 percent a year.” The lenders were using “an American Indian tribe” in an attempt to skirt state laws.
Politico reported back on 11/27/17 that new “acting director” of the Consumer Financial Protection Bureau (CFPB) Mick Mulvaney claims “the bureau will continue to meet its legal and statutory deadlines.”
MAKE IT A DOUBLE:
Mulvaney accepted more than $62,000 from payday lenders when he was in Congress – the very industry that will benefit from his decision today. [OpenSecrets search for Payday Lenders, Center for Responsive Politics, accessed 12/13/17.]
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Netspend Has Given Sen. David Perdue More Than $33,000–Now He’s Bending Over Backwards to Help This Prepaid Predator Save $80 Million by Making Sure It Can Continue to Swindle Hard-Working Americans
WASHINGTON, D.C. – Today, Allied Progress filed suit in the U.S. District Court for the District of Columbia to obtain correspondence that could further expose predatory prepaid debit card provider Netspend and its allies in the Senate, who are seeking to roll back the Consumer Financial Protection Bureau’s (CFPB) rule on prepaid debit cards. The rule in question would provide the hard-working men and women who use these cards with some of the same protections afforded to those using traditional credit and bank cards.
The lawsuit follows yesterday’s Atlanta Journal-Constitution story detailing the extreme measures Sen. David Perdue (R-GA) has taken to benefit Netspend, a company whose PAC and executives have given Perdue more than $33,000 in campaign contributions since 2014.
“Sen. Perdue hopes none of us will notice as he uses procedural gymnastics to move this shady legislation through the Senate as quickly as possible to help a major campaign donor,” said Karl Frisch, executive director of Allied Progress.
He continued, “That is why today, we are going to court to compel the release of any correspondence that might shed additional light on the shadowy efforts being undertaken to help this predatory company by lobbyists, other Senators, and the company itself.
“Netspend just settled fraud charges with the FTC for more than $50 million. It doesn’t deserve the special treatment it is receiving from Sen. Perdue and others. The American people deserve to know what the hell is going on here,” he concluded.
Background on Allied Progress Lawsuit to Release Documents
- Allied Progress Filed FOIA Request with CFPB: The request seeks all communications from Netspend, its lobbyists, and parent company, as well as communications from all Senators co-sponsoring Sen. Perdue’s legislation to repeal the prepaid debit card rule. It notes that such information could be vital to the debate over repeal, which could happen any day. (View Requests – PDF)
- Allied Progress Sought Expedited Handling of FOIA Request, Was Rejected: Allied Progress sought expedited handling of its FOIA requests noting that the issue may come to the Senate floor for debate very soon. That request was rejected. (View Denials – PDF)
- Allied Progress Filed Suit in U.S. District Court for the District of Columbia to Expedite Request: Allied Progress on Tuesday, April 18, filed suit requesting expedited processing for the group’s two FOIA requests to obtain all correspondence between government officials relating to Netspend. (View Legal Filings – PDF)
Background on Perdue’s Push to Repeal Prepaid Debit Cardholder Protections
- Perdue Going to Bat for Predatory Prepaid Debit Card Co Netspend: Sen. Perdue is doing legislative gymnastics to help predatory prepaid debit card company Netspend by trying to kill a Consumer Financial Protection Bureau (CFPB) rule that helps cardholders by giving them many of the same protections enjoyed by traditional credit and debit card customers.
- Consumer Bureau Rule in Question Supported by Industry Leaders: The CFPB rule in question provides basic overdraft protection to the twenty-three million Americans who use prepaid debit cards regularly, and requires card providers to disclose any fees associated with the card. These fundamental protections are supported by the industry trade group The Center for Financial Services Innovation and Green Dot, the largest provider of prepaid debit cards in the United States.
- Perdue Doing Legislative Gymnastics to Bypass Normal Lawmaking Process: Sen. Perdue has successfully sponsored a discharge petition to bypass normal legislative procedures and repeal this rule. Discharge petitions are seldom used by members in the majority party. This is something Perdue has never done on any other issue–ever.
- Netspend Settled $50 Million Lawsuit One Day after Discharge Petition Cleared Senate: On March 31, 2017, the Federal Trade Commission (FTC) settled fraud charges with Netspend resulting in the company agreeing to pay $53 million in fines to customers for engaging in “deceptive” practices.
- Netspend Has Given Perdue More Than $33,000 Since 2014: Netspend and its parent company, as well as current and past company executives, have given Sen. Perdue’s campaign more than $33,000 in just the past few years, according to data from Center for Responsive Politics.
- Vote Could Come as Early as Week of April 24: Now that Perdue has successfully filed a discharge petition, his legislation to repeal the CFPB’s prepaid debit card rule could come to the Senate floor for a vote as early as the week of April 24.
To speak with Karl Frisch about Allied Progress’ lawsuit, please contact Mike Czin at 202-286-7654 or email@example.com.
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Allied Progress is a nationwide, progressive advocacy organization that uses hard-hitting research and creative campaigns to hold Wall Street and powerful special interests accountable. Since launching in 2015, the organization has led high-profile campaigns on several issues including reforming the payday lending industry and exposing the those working to cripple the Consumer Financial Protection Bureau (CFPB).
Washington DC – All eyes are on Labor Secretary Eugene Scalia to reverse course on the Trump administration’s risky and reckless decision to deprioritize an Obama-era rule that would help protect frontline health care workers dealing with infectious outbreaks like the Coronavirus. Allied Progress called on Scalia to set aside his rigid anti-government ideology and immediately advance this rule in the interest of workplace safety and public health.
Scalia, a longtime corporate attorney, had a history of criticizing government involvement in public safety before taking his post as Labor Secretary. Scalia wrote in 2005: “The Government does not have the sole-or even primary-role in furthering occupational safety and health or compliance with the employment laws.” Scalia also represented eight Business Trade Groups in a lawsuit against OSHA’s cooperative compliance program, which determined particularly dangerous works sites and established protocols to bolster safety.
“The President may not take this public health threat seriously, but workers on the front lines of coronavirus response are counting on Secretary Scalia to do his job regardless,” said Derek Martin, director of consumer watchdog group Allied Progress. “Now is not the time to hide behind rigid ideological arguments as an excuse to ignore workers in need. The Secretary may not like it, but one of most important responsibilities of the Labor Department is enforcing the laws that protect the health and safety of the nation’s workforce. To walk away from that responsibility in the face of this crisis is a very dangerous game.”
WHAT YOU NEED TO KNOW:
Will Donald Trump and Eugene Scalia Set Aside Rigid Ideology To Help Frontline Healthcare Workers Combat The Coronavirus?
The Trump Administration Mothballed An Obama-Era Rule To Protect Healthcare Workers From Infectious Outbreaks Like Coronavirus—And Now Labor Secretary Eugene Scalia Has Yet To Act During The Growing Emergency.
A Proposed Regulation From The Obama-Era Labor Department Could Be Helping Frontline Healthcare Workers With Coronavirus Response Right Now – But The Regulation Was Deemed “Less Urgent” By The Trump Administration.
As U.S. Healthcare Workers Begin To Confront The Spread Of Coronavirus, “A Proposed Regulation Designed To Protect Them From Infectious Diseases […] Languishes Inside A Federal Agency.” “As more than 100 hospital workers remain in self-imposed quarantine in California, a proposed regulation designed to protect them from infectious diseases such as the coronavirus languishes inside a federal agency.” [Kimberly Kindy, “This regulation could protect health-care workers from the coronavirus. It hangs in limbo.,” The Washington Post, 03/05/20]
The Obama Administration Had Begun To Adopt A Regulation To “Require Employers To Provide Protective Gear For Health-Care Workers,” But “The Trump Administration In 2017 Moved It To A Less Urgent, Long-Term Agenda And Work On It Stopped.” “The draft regulation would require employers to provide protective gear for health-care workers and to create infection-control plans, which could include building isolation rooms. The Obama administration was working to adopt the regulation, but the Trump administration in 2017 moved it to a less urgent, long-term agenda and work on it stopped.” [Kimberly Kindy, “This regulation could protect health-care workers from the coronavirus. It hangs in limbo.,” The Washington Post, 03/05/20]
Former OSHA Heads, Healthcare Worker Unions and Congress Have Called For The Regulation To Be Implemented On An Emergency Basis During The Coronavirus Crisis
Congress, Unions, And A Former Occupational Safety And Health Administration (OSHA) Head Are Demanding That The Regulation Be “Expedited” And Requesting That The Labor Department Uses Measures To “Issue A Temporary Emergency Standard When A ‘Grave Danger’” To Workers Arises. “Now, members of Congress, unions representing health-care workers, and the former head of the Occupational Safety and Health Administration (OSHA) are calling for the proposal to be expedited. They are petitioning the Labor Department, which oversees OSHA, to turn to a little-used federal law that allows the agency to issue a temporary emergency standard when a ‘grave danger’ or ‘new hazards’ emerge in the workplace.” [Kimberly Kindy, “This regulation could protect health-care workers from the coronavirus. It hangs in limbo.,” The Washington Post, 03/05/20]
Reps. Bobby Scott (D-VA) And Alma Adams (D-NC) Have Asked Labor Secretary Eugene Scalia To Make It “‘Clear It Is Time’ To Set An Emergency Standard” In Response To Coronavirus. “In a letter sent Thursday afternoon to Labor Secretary Eugene Scalia, Reps. Robert C. ‘Bobby’ Scott (D-Va.) and Alma Adams (D-N.C.) said the ‘widespread epidemic of a virulent novel airborne’ make it ‘clear it is time’ to set an emergency standard.” [Kimberly Kindy, “This regulation could protect health-care workers from the coronavirus. It hangs in limbo.,” The Washington Post, 03/05/20]
An Occupational Health Professor At George Washington University Said, “‘The Framework Is There,’” To Require Employers To Better Protect Healthcare Workers, “‘If OSHA Wanted To Modify The Standard, It Could Put It Out Tomorrow.’” “The former head of OSHA under President Barack Obama said years of work have gone into the draft regulation, which included seeking and including advice from the health-care industry. That could allow OSHA to move quickly. ‘The framework is there. If OSHA wanted to modify the standard, it could put it out tomorrow,’ said David Michaels, who now works as an environmental and occupational health professor at George Washington University.” [Kimberly Kindy, “This regulation could protect health-care workers from the coronavirus. It hangs in limbo.,” The Washington Post, 03/05/20]
Previously, Eugene Scalia Has Argued That The Government Does Not Have “The Sole-Or Even Primary-Role In Furthering Occupational Safety And Health Or Compliance With The Employment Laws […]”
The DOL’s Occupational Health And Safety Administration (OSHA) Is Responsible For Protecting Workers From Unsafe Work Environments.
DOL’s Occupational Safety And Health Administration (OSHA) Enforces Workplace Safety And Health Standards. “The Occupational Safety and Health Administration primarily administers and enforces the Occupational Safety and Health Act (OSH Act; P.L. 91-596), which provides health and safety standards for workplaces and authorizes DOL to provide assistance and sanctions to enforce compliance.” [“Major Functions of the U.S. Department of Labor,” Congressional Research Service, 09/07/18]
Eugene Scalia Wrote That The Government Does Not Have “The Sole-Or Even Primary-Role In Furthering Occupational Safety And Health Or Compliance With The Employment Laws […]”
While A Partner At Gibson Dunn, Eugene Scalia Wrote A Law Review Article On “Inspection And Enforcement Strategies In Labor And Employment Law,” With A Focus On The Occupational Safety And Health Administration (OSHA). “The subject of this Essay is inspection and enforcement strategies in labor and employment law, with particular focus on the Occupational Safety and Health Administration (OSHA). I approach the subject from two somewhat different perspectives, having been a private practitioner representing clients being investigated and prosecuted by OSHA, and having also served as Solicitor of Labor, with OSHA as one of my clients and with responsibility myself for prosecuting OSHA cases.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
- Eugene Scalia Was A Partner At Gibson, Dunn & Crutcher LLP At The Time. “Eugene Scalia is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher LLP. He is co-chair of the firm’s Labor and Employment Practice Group and a member of the firm’s Appellate and Constitutional Law Practice Group.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Eugene Scalia Wrote, “The Government Does Not Have The Sole-Or Even Primary-Role In Furthering Occupational Safety And Health Or Compliance With The Employment Laws,” Arguing That It Is Primarily Left To Employers And Employees. ““The government does not have the sole-or even primary-role in furthering occupational safety and health or compliance with the employment laws generally. Others with those responsibilities include employers and employees, individually and collectively through their labor unions.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Eugene Scalia Argued That In Lieu Of Government Oversight, “Unions Are Among The Most Effective Advocates For Workplace Safety.” “Unions are among the most effective advocates for workplace safety. In unionized workplaces on a daily basis, unions play an important role in identifying and addressing occupational hazards. When necessary-and at times when not necessary-unions contact OSHA to complain and trigger inspections. So, the question arises, as the government sets its inspection and enforcement priorities, what consideration should be given the fact of union representation at a worksite?” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Eugene Scalia Has Argued That “OSHA’s [Occupational Safety And Health Administration’s] Inspection Authority Was Openly Used As A Form Of Coercion” And “An Imposition Of Government Power” Under A 1998 Program In Which OSHA Tried To Increase Accountability For Workplaces With High Rates Of Worker Injury.
Eugene Scalia Wrote, “OSHA’s Inspection Authority Was Openly Used As A Form Of Coercion” Under A 1998 Program In Which The Agency Told Employers They Could Either Adhere To Additional Safety Requirements Or Face Increased Inspections. “The most notable example of this approach is a 1998 OSHA program called the ‘Cooperative Compliance Program.’ Under the program, employers with high reported injury rates were told they had been selected for onerous comprehensive ‘wall-to-wall’ inspections. But, they were advised, we will greatly reduce the likelihood of inspection-and any inspections that do occur will be relatively benign-if you agree to do a series of things currently not required by federal law. Under this program, which was invalidated by the D.C. Circuit, OSHA’s inspection authority was openly used as a form of coercion to prompt employers to do things that, at the time, OSHA did not have the authority to require.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Eugene Scalia Called OSHA Inspections “An Imposition Of Government Power That Causes A Company To Change Its Practices Even Though The Law Does Not Require That It Do So.” “Another (perhaps related) view is that inspection itself is a form of enforcement, in the sense that it is an imposition of government power that causes a company to change its practices even though the law does not require that it do so.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Eugene Scalia Argued That During Unannounced OSHA Inspections, The Government “Comes Uninvited To Private Property.” “The third view of the purpose of inspections-which is my view, the most common view, and the view that coincides with the Fourth Amendment-is that they are for investigative and enforcement purposes only. OSHA has separate consultation and compliance assistance programs to show employers how to improve workplace safety. But when it comes uninvited to private property, the government has a right of access only when it has probable cause to believe that a violation of a law enforceable by that agency has occurred.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Despite These Arguments, Eugene Scalia Admitted That In OSHA Inspections, “Probable Cause Is Defined Somewhat Loosely.” “In administrative inspection schemes, probable cause is defined somewhat loosely-but the justification for government entry remains the search for a prosecutable violation of the law.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Scalia Has Also Likened OSHA Inspectors To Ronald Reagan’s “Nine Most Terrifying Words In The English Language.”
Eugene Scalia Invoked An Anti-Government Quote From Ronald Reagan—“‘The Nine Most Terrifying Words In The English Language Are: I’m From The Government, And I’m Here To Help.’”—When Discussing OSHA Inspections.
Eugene Scalia Said That OHSA Inspections Were Based On A Philosophy Of “‘We’re The Government And We’re Here To Help.’” “For instance, OSHA inspections may be viewed as a sort of house-call for troubled employers: federally funded corporate consulting intended less to effect compliance with the law and more to help employers find ways to address hazards regardless of whether those hazards violate federal law. Call this approach, ‘We’re the government and we’re here to help.’ Under this view, it does not matter whether violations are found on an OSHA inspection, as long as there has been a chance for the government to reach out and touch an employer.” [Eugene Scalia, “Inspection and Enforcement Strategies at the U.S. Department of Labor,” University of Pennsylvania Journal of Labor & Employment Law, Spring 2005]
Ronald Reagan Once Said, “‘The Nine Most Terrifying Words In The English Language Are: I’m From The Government, And I’m Here To Help.’” [“August 12, 1986 Reagan Quotes and Speeches,” Ronald Reagan Presidential Foundation & Institute, accesed 07/24/19]
Washington DC (February 27, 2020) – It’s that time of the year again when billionaire Trump Education Secretary Betsy DeVos must face Congress to defend the budget blueprint for her right-wing, ideological education agenda. Among the many controversial line items in the administration’s FY 2021 budget, DeVos is proposing — for a fourth year in a row — to fully dismantle the Public Service Loan Forgiveness (PSLF) program.
The PSLF program was created in 2007 with strong bipartisan support. That’s because it’s common sense for the government to forgive federal student loans for those who pursue careers that may not pay the best, but are a benefit to the community, like a firefighter, teacher, nurse, or public defender. The bar to qualify wasn’t meant to be high: just keep up with loan payments for 10 years while working for the government or in the public interest. Unfortunately, the program has matured for many Americans on the watch of Secretary DeVos, who apparently thinks public service and keeping the government’s promise is for the birds.
Through 2018, DeVos’ Education Department approved less than 300 borrowers for public service loan forgiveness among nearly 40,000 applicants – an abysmal 99% rejection rate. Thousands of nurses, firefighters, teachers, and other professionals, who were promised forgiveness after a repayment period, are now facing the prospect of having to pay back the full balance of their student loans on a limited income. And it’s become clear that this was not a bug but a feature of DeVos’ oversight. In September 2019, the Government Accountability Office (GAO) criticized DeVos in a scathing report for not properly utilizing a 2018 congressional “fix” designed to make it easier for public service professionals to complete the paperwork for PSLF.
“Secretary DeVos may have failed year after year to kill this bipartisan loan forgiveness program, but that hasn’t stopped her from making it as hard as possible for public service professionals to qualify for it,” said Derek Martin, director of Allied Progress. “The Trump administration has no good excuse for denying these hard-working public servants the relief they deserve for their sacrifices, but following the money reveals why they’re doing it. The student loan servicing industry, which has given nearly $2 million to Trump’s supporters in Congress, would rather keep these selfless student borrowers on the hook and paying interest for decades to come. And in this administration, money trumps everything.”
Allied Progress recently released results of a national poll that found Secretary DeVos’ approval rating has plummeted to 28 percent, and that there’s strong support across the political spectrum for Congress to investigate her recent misconduct.
WHAT YOU NEED TO KNOW:
Déjà Vu For Betsy DeVos: FY2021 Budget Proposal Replays Failed Record On Student Loan Forgiveness
The Trump-DeVos FY 2021 Budget Would Eliminate The Public Service Loan Forgiveness (PSLF) Program, Which Enables Borrowers To Accept Lower Paying Jobs In the Public Sector Like Teaching, Nursing, And Social Work, While Still Being Able To Manage Their Student Debt.
The FY 2021 Budget Proposes “Eliminating The Public Service Loan Forgiveness Program.”
The “Budget Again Proposes Eliminating The Public Service Loan Forgiveness Program.” “Trump’s budget again proposes eliminating the Public Service Loan Forgiveness Program.” [Michael Stratford, “Trump seeks new limits on PLUS loans, familiar cuts to student aid,” Politico, 02/10/20]
PSLF Can Be Used By “Teachers, Nurses, Social Workers And Other Public Sector Workers” To Forgive Their “Remaining Federal Student Loans” After They Have “Made 10 Years’ Worth Of Payments.”
PSLF Cancels The “Remaining Federal Student Loans” After “Made 10 Years’ Worth Of Payments” Have Been Made By People Like “Teachers, Nurses, Social Workers And Other Public Sector Workers.” “Teachers, nurses, social workers and other public sector workers benefit from the program, which cancels their remaining federal student loans after they’ve made 10 years’ worth of payments.” [Katie Lobosco, “Trump again proposes ending student loan forgiveness program,” CNN, 02/10/20]
The PSLF Program Incentivizes Workers “To Stay In Lower-Paying Public-Sector Jobs” As They Work Towards Paying “Down Their Student Debt.”
The PSLF Program “Gives Workers Incentives To Stay In Lower-Paying Public-Sector Jobs While They Paid Down Their Student Debt.” “The program was signed into law by President George W. Bush in 2007. It gives workers incentives to stay in lower-paying public-sector jobs while they paid down their student debt. The first time anyone would have made enough payments to qualify was under the Trump administration, during the fall of 2017.” [Katie Lobosco, “Trump again proposes ending student loan forgiveness program,” CNN, 02/10/20]
Borrowers Have Said If The Trump Administration Ended The PSLF Program, They Would Be Forced “To Rethink Some Life Goals,” Like Their Career Paths And Purchasing A Home.
Some Borrowers Say If The Trump Administration Eliminated PSLF, They Would Be Forced “To Rethink Some Life Goals.”
Some “Borrowers Said The Program’s Demise Would Force Them To Rethink Some Life Goals.” “Other borrowers said the program’s demise would force them to rethink some life goals.” [Elisabeth Buchwald, “Trump’s bid to end Public Service Loan Forgiveness could mean ‘major life changes’ for some student-loan borrowers,” MarketWatch, 02/15/20]
One Borrower Working As An Assistant Public Defender Said He Has Been Diligent In Ensuring He Will Qualify For PSLF But If The Program Ended, He Is “Not Sure That He Would Be Able To Keep His Job.”
One Borrower Working As An “Assistant Public Defense Lawyer” Said He Has Been Diligent In Ensuring “He Can Qualify For Student Loan Forgiveness” But “If The PSLF Program Ended, He’s Not Sure That He Would Be Able To Keep His Job.” “J.P. Gilbert, a 30-year-old assistant public defense lawyer based in central Florida, hasn’t missed a single loan repayment since he started paying off his student loan debt five years ago. He’s been diligent about making payments on time and keeping his government job so that in five years he can qualify for student loan forgiveness. […] ‘I love the work that I do but outside of the love of what I do the really biggest thing about me being in this job is the ability to qualify for the loan forgiveness program,’ Gilbert said. He now has a six-month-old daughter, and if the PSLF program ended, he’s not sure that he would be able to keep his job, he told MarketWatch. He graduated from Stetson University’s College of Law which currently costs $44,468 a semester for full-time students. [Elisabeth Buchwald, “Trump’s bid to end Public Service Loan Forgiveness could mean ‘major life changes’ for some student-loan borrowers,” MarketWatch, 02/15/20]
Another Borrower Working At A Nonprofit Said They “‘Would Have To Make Serious Life Changes’” And Would “‘Not Be Able To Save Up For A House’” If The PSLF Program Was Cancelled.
A Borrower Working As A “Legal And Judicial Director” At A Nonprofit Said They “‘Would Have To Make Serious Life Changes And Not Be Able To Save Up For A House’” If The PSLF Program Was Cancelled. “‘I feel strongly about the career I went into,’ Mai El-Sadany, a 30-year-old legal and judicial director at the Tahrir Institute For Middle East Policy, a nonprofit based in Washington D.C., said. ‘But I would have to make serious life changes and not be able to save up for a house.’ Like Gilbert, El-Sadany also took out student loans to attend law school, in her case, at Georgetown University. She owes around $62,000 after paying 53 of the 120 qualifying payments toward forgiveness, which she hopes to be granted in Sept. 2025.” [Elisabeth Buchwald, “Trump’s bid to end Public Service Loan Forgiveness could mean ‘major life changes’ for some student-loan borrowers,” MarketWatch, 02/15/20]
The Trump Administration Has Repeatedly Tried To Eliminate The Public Service Loan Forgiveness Program Entirely After Approving Just 300 Borrowers For Forgiveness From The Initial Batch Of Nearly 40,000 Applicants.
The Trump Administration’s Proposed FY18 Budget Would’ve Ended Both Public Service Loan Forgiveness and “Perkins Loans For Low-Income Students.”
On May 18, 2017 It Was Announced The Trump Administration’s Proposed FY18 Budget Would Entail “Ending Public Service Loan Forgiveness And Reforming Income-Driven Repayment Plans” As Well As “End Subsidized Loans” And “Perkins Loans For Low-Income Students.” “Besides ending public service loan forgiveness and reforming income-driven repayment plans, the ad-ministration is also proposing to end subsidized loans (for which the government pays interest while the student is in school) and Perkins loans for low-income students.” [Emma Brown, “Five key questions about Trump’s education budget,” The Washington Post, 05/18/17]
- DeVos Characterized The Budget As A “Historic Investment In America’s Students.” “U.S. Secretary of Education Betsy DeVos maintained the budget prioritizes students. ‘This budget makes an historic investment in America’s students,’ DeVos said.” [Ben Chapman, “Trump budget proposal’s $11B education cut leaves advocates outraged,” Daily News, 05/23/17]
- On June 6, 2017, Despite The Details Of Her Budget Proposal, DeVos Told The Senate “That Student Debt Is ‘Of Grave Concern.’” “Betsy DeVos said Tuesday that student debt is ‘of grave concern.’ But Democrats on the Senate Appropriations Committee slammed DeVos, claiming that her concern for student loan borrowers is not reflected in the Department of Education’s proposed budget. Released two weeks ago, it calls for a 13.5% cut to funding for the department next year and some drastic changes to the federal student aid program.” [Katie Lobosco, “Betsy DeVos: Student loan debt is ‘of grave concern,’” CNN, 06/06/17]
- Even Republican Chairman Roy Blunt Told DeVos Her Proposal Was A “‘Difficult Budget Request To Defend’” And Said He Thought It Was “‘All But Impossible To Get Through This Committee.’”“‘This is a difficult budget request to defend,” Sen. Roy Blunt, R-Mo., said at a hearing held by the sub-committee on labor, health and human services. “I think it’s likely that the kinds of cuts that are proposed in this budget will not occur, so we need to fully understand your priorities and why they are your priorities.” Blunt was addressing Education Secretary Betsy DeVos, who appeared on Capitol Hill […] ‘I think will be all but impossible to get through this committee.’” [Moriah Balingit. “‘All but impossible’: Republican senator says Trump’s education cuts won’t get through Congress,” The Washington Post, 06/07/17]
- Trump’s 2019 Budget Also Sought To End Public Service Loan Forgiveness And More Than Halve College Work-Study Programs. “DeVos again wants to end loan forgiveness for public-sector workers and slash more than half of the budget for college work-study programs. Those proposals failed in a Republican-led Congress and have even less of a chance with the Democrats controlling the House.” [Moriah Balingit and Danielle Douglas-Gabriel, “Trump seeks to slash $8.5 billion from Education Department budget,” The Washington Post, 03/11/19]
In 2019, The Trump Administration And Betsy DeVos Approved Less Than 300 Borrowers For Public Service Loan Forgiveness Among Nearly 40,000 Applicants.
On April 3, 2019, It Was Reported That Of 38,460 Applicants for Public Service Loan Forgiveness, ED Had Only “Approved 262 Borrowers For… Forgiveness.” “The vast majority of individuals who applied for the second chance at public service loan forgiveness that Congress created last year were again denied that benefit, according to new Education Department data. […] The Education Department said that, as of last week, it had approved 262 borrowers for loan forgiveness under the temporary program. That amounted to $10.6 million of discharged loan debt. Of the 9,820 applications that the department reviewed, 1,184 remain pending and 8,374 were rejected. The applications were most frequently rejected because borrowers had not met the requirement of making 10 years of loan payments, the department said. [Michael Stratford, “Few borrowers obtain public service loan forgiveness on second try,” Politico, 04/03/19]
As Of December 2019, The Trump Administration And Betsy DeVos Had Granted Public Service Loan Forgiveness Discharges To Just 1.2% Of The Program’s Applicants, Or 1,565 Of The 126,817 Borrowers Who Have Applied.
As Of December 2019, There Were 1,565 “Unique Borrowers With PSLF Discharges Processed” Of The 126,817 “Unique Borrowers Submitting PSLF Applications.” As of December 2019, there were 1,565 “Unique Borrowers with PSLF discharges processed” of the 126,817 “Unique Borrowers Submitting PSLF Applications.” [Public Service Loan Forgiveness Data, December 2019 Report, U.S. Department of Education, December 2019]
DeVos Faces A Lawsuit Filed By The American Federation of Teachers Over “Gross Mismanagement” Of The Public Service Loan Forgiveness Program.
On July 11, 2019, One Of The Nation’s Biggest Teachers Unions Sued Betsy DeVos For “Gross Mismanagement” Of The Public Service Loan Forgiveness Program. “The American Federation of Teachers, one of the country’s biggest teachers unions, sued Education Secretary Betsy DeVos on Thursday alleging gross mismanagement of a loan forgiveness program for public servants.” [Danielle Douglas-Gabriel, “American Federation of Teachers sues Betsy DeVos over public service loan forgiveness program,” The Washington Post, 07/11/19]
- The Lawsuit Claims That Betsy DeVos’ Education Department “Ignored Borrower Complaints,” In Violation Of Federal Law And The Constitution. “Thursday’s lawsuit, filed in the U.S. District Court for the District of Columbia, claims the Education Department ignored borrower complaints about loan servicers providing inaccurate information and making administrative mistakes. The alleged mismanagement of the loan forgiveness program violates federal law and the Constitution, according to the lawsuit.” [Danielle Douglas-Gabriel, “American Federation of Teachers sues Betsy DeVos over public service loan forgiveness program,” The Washington Post, 07/11/19]
In 2019, DeVos Faced Criticism Over Failing To Prevent Disabled Borrowers From Having Their Social Security Checks Garnished, While Borrowers With Cancer Were Not Given Legally Approved Loan Payment Deferments.
In June 2019, DeVos Was Criticized For Not Informing Disabled Borrowers Of Their Rights To Avoid Having Their Social Security Checks Garnished.
In June 2019, Consumer Advocates Warned That Disabled Student Loan Borrowers Are Not Being Properly Informed Of Their Ability To Avoid Having Their Social Security Benefits Garnished When They Default On Their Loans. “When a borrower defaults on their federal student loan, the government can garnish their Social Security benefits, wages and tax refunds to get its money back. Borrowers have the right to mitigate or avoid these consequences by taking certain steps — including, if they’re disabled, filing for a disability discharge. But borrower advocates have complained for years that a lack of information from the government and the companies and nonprofit organizations it hires to manage the student-loan program have meant struggling borrowers face challenges accessing the lifelines to which they’re entitled.” [Jillian Berman, “Student-loan borrowers with disabilities will be reimbursed after their Social Security checks were needlessly garnished,” MarketWatch, 06/17/19]
That Same Month, DeVos Also Faced Criticism For Not Facilitating Deferments For Cancer Patients, Even Though President Trump Had Signed The Provision Into Law Nine Months Prior.
Also In June 2019, It Was Reported That The Education Department Has Failed To Provide Student Loan Servicers An Application For Cancer Deferment Nine Months After “President Donald Trump Signed Into Law A Bill Allowing People With Cancer To Press Pause On Their Federal Student Loan Payments.” “Last September, President Donald Trump signed into law a bill allowing people with cancer to press pause on their federal student loan payments. More than nine months after the law took effect, borrowers still can’t access the cancer deferment. At issue seems to be this: The Department of Education has yet to provide the companies that administer its federal student loan programs with an official application for cancer patients to apply.” [Annie Nova, “Student loan borrowers with cancer are supposed to get a break from their bills. That’s not happening,” CNBC, 06/29/19]