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Financial Services Law Insights and Observations

Senators request explanation for delay in reestablishing CFPB/Department of Education MOU

Federal Issues CFPB Department of Education MOUs Student Lending

Federal Issues

On July 18, Senators Patty Murray (D-WA) and Sherrod Brown (D-Ohio) sent a letter to CFPB Director Kathy Kraninger and U.S. Department of Education (Department) Secretary Betsy DeVos requesting an explanation as to why a statutorily required Memorandum of Understanding (MOU) terminated by the Department in 2017 has not been reestablished. As previously covered by InfoBytes, the terminated MOU allowed the sharing of information connected with the oversight of federal student loans. The Senators’ letter raises questions concerning the disagreement between the agencies over why the MOU was terminated, as well as “conflicting explanations” provided to Congress regarding the delay in reestablishing the MOU. According to the Senators, Kraninger previously commented in April that creating a new MOU with the Department was a priority for the Bureau (see InfoBytes coverage here). However, the Senators note that this statement conflicts with formal responses from the Department for a hearing record received three weeks after Kraninger’s comments, in which the Department claimed the Bureau “has not formally attempted to reestablish an MOU.” The Senators asked the agencies to provide a written explanation addressing (i) the basis for terminating the MOU; (ii) whether an attempt to reestablish the MOU has been made; (iii) any outstanding unresolved issues preventing reestablishment of the MOU; and (iv) an expected timeline for reestablishing the MOU. The Senators strongly encouraged the agencies “to reestablish the MOU immediately.”

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