FOIA Prompts CFPB Release of Suppressed Report on Banks Burying Students with Fees for College-Sponsored Accounts

Mulvaney Took Thousands from Wells Fargo — Congress Should Investigate Cover-Up


WASHINGTON, D.C. – Today, Allied Progress received a response to its Freedom of Information Act (FOIA) request seeking a report first discussed publicly in the resignation letter of Seth Frotman, the Bureau’s former Student Loan Ombudsman. Frotman’s widely reported letter accused Mulvaney’s CFPB of burying the report but offered few other details. The report in question shows that Wells Fargo and other big banks that provide college-sponsored deposit and prepaid accounts are burying students with crippling fees. The Department of Education is not using its power to stop the practice.

This report shows Wells Fargo and other big banks that provide college-sponsored deposit and prepaid accounts are burying students with crippling fees and the Department of Education is doing nothing about it. No wonder Mulvaney’s CFPB tried to make sure it would never see the light of day. The actions by these banks and CFPB officials that sought to cover it up must be investigated by Congress,” said Karl Frisch, executive director of Allied Progress.

During his time in Congress, Mulvaney was showered with thousands of dollars in campaign cash from Wells Fargo’s employee PAC.

WHAT YOU NEED TO KNOW:

Mulvaney’s CFPB Suppressed The Publication Of A Report Prepared By Its Own Staff That Analyzed “Legally Dubious Account Fees” Levied On Students Across The Country.

The CFPB’s Former Student Loan Ombudsman Claimed That Bureau Leadership Under Mick Mulvaney Suppressed A Report Finding That Big Banks Were Ripping Off Students Across The Country With “Legally Dubious Account Fees.”

In His Resignation Letter, CFPB Student Loan Ombudsman Seth Frotman Wrote That “Bureau Leadership Suppressed The Publication Of A Report Prepared By Bureau Staff” Finding “That The Nation’s Largest Banks Were Ripping Off Students On Campuses Across The Country By Saddling Them With Legally Dubious Account Fees.” In late August, CFPB Student Loan Ombudsman Seth Frotman tendered his resignation to Acting Director Mick Mulvaney, claiming that bureau leadership had “turned its back on young people and their financial futures.” Mr. Frotman noted, in his resignation letter, that “Bureau leadership suppressed the publication of a report prepared by Bureau staff” that found “that the nation’s largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees.” [Cory Turner, “Student Loan Watchdog Quits, Says Trump Administration ‘Turned Its Back’ On Borrowers,” NPR, 08/27/18]

The CFPB’s Unpublished Report On College-Sponsored Prepaid Accounts Found That Wells Fargo Charged Students The Highest Fees For Their Accounts

An Unpublished Report By The CFPB’s Office For Students And Young Consumers Analyzed Fees Associated With College-Sponsored Deposit And Prepaid Accounts.

The CFPB’s Office For Students And Young Consumers Prepared An Unpublished Analysis “About Student Use Of College-Sponsored Deposit And Prepaid Accounts” That Was Shared With The Department Of Education In February 2018. On February 5, 2018, the CFPB shared “an unpublished analysis prepared by the Bureau’s Office for Students and Young Consumers about student use of college-sponsored deposit and prepaid accounts” with A. Wayne Johnson, the Chief Strategy and Transformation Officer in the Department of Education’s Office of Federal Student Aid. [Report on College-Sponsored Deposit and Prepaid Accounts, Consumer Financial Protection Bureau, 02/05/18]

The Report Found That Wells Fargo Charged Students The Highest Fees Of All Account Providers.

The Report “Found That The Number Of Account Holders And The Average Account Fees Paid By Those Account Holders Vary Greatly Between Account Providers.” “The Bureau found that the number of account holders and the average account fees paid by those account holders vary greatly between account providers. Colleges identified 14 account providers as offering sponsored accounts during the 2016-2017 Academic Year. Weighted average account fees paid by students to account providers ranged from $0 to $46.99 over the full 12-month reporting period. Collectively, students using accounts at colleges identified in this study paid $27,600,000 in account fees.” [Report on College-Sponsored Deposit and Prepaid Accounts, Consumer Financial Protection Bureau, 02/05/18]

  • Wells Fargo Charged The Highest Average Annual Fee—$46.99—Of All The Account Providers Analyzed By The CFPB. Wells Fargo was the provider for 304,227 of 1,322,766 (22.9%) active accounts analyzed by the CFPB. Wells Fargo had the highest average fee per year ($46.99) of the account providers analyzed by the CFPB. [Report on College-Sponsored Deposit and Prepaid Accounts, Consumer Financial Protection Bureau, 02/05/18]

Acting Director Mick Mulvaney Took Thousands In Campaign Cash From Wells Fargo.

The Wells Fargo Company Employee PAC Gave $12,000 To Mick Mulvaney’s Congressional Campaigns.

On June 24, 2016 The Wells Fargo and Company Employee PAC gave $1,500 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 06/24/16]

On November 30, 2015 the Wells Fargo and Company Employee PAC gave $2,500 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 11/30/15]

On April 20, 2015 the Wells Fargo and Company Employee PAC gave $2,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 04/20/15]

On March 21, 2014 the Wells Fargo and Company Employee PAC gave $1,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 03/21/14]

On December 12, 2013 the Wells Fargo and Company Employee PAC gave $1,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 12/12/13]

On October 21, 2013 the Wells Fargo and Company Employee PAC gave $1,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 10/31/13]

On August 2, 2013 the Wells Fargo and Company Employee PAC gave $1,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 08/02/13]

On June 12, 2012 the Wells Fargo and Compancy Employee PAC gave $1,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 06/12/12]

On March 28, 2012 the Wells Fargo and Company Employee PAC gave $1,000 to Mulvaney for Congress. [Wells Fargo and Company Employee PAC Schedule B, Federal Elections Commission, 03/28/12]

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