Rohit Chopra, the student-loan ombudsman for the Consumer Financial Protection Bureau, is using his public stage to push student loan companies into improving their treatment of borrowers, the Wall Street Journal reported today. But his style of applying pressure through public means — a big departure from the more measured style of other financial regulators — is causing friction. Chopra’s ombudsman position at the CFPB was created at the behest of Sen. Sherrod Brown (D-Ohio) and other lawmakers to represent the interests of private student loan borrowers, who those legislators saw as especially vulnerable to abuses. In this role, Chopra tracks trends and problems in the student loan market, recommends policy changes to Congress and other federal agencies, and serves as an internal CFPB expert on student loan issues. “There’s more tension between banks and those in the CFPB’s student-lending division than in all other areas of the CFPB combined,” said Richard Hunt, president of the Consumer Bankers Association, a trade group that has many private student loan firms as members. The CFPB has been at odds with private student lenders on several issues, including whether the industry is playing down borrowers’ default rates and doing enough to help those struggling with student debt. Lenders have countered that the bureau is making them a scapegoat and that federal-loan defaults are a far larger problem in the student loan industry.
