The bill amends the Consumer Financial Protection Act of 2010 to create an Assistant Director and Student Loan Borrower Advocate at the CFPB and to establish an Office for Students and Young Consumers. It directs the Advocate to accept and attempt to resolve complaints about private and Federal student loans, compile annual reports on the student loan marketplace and campus financial products, and recommend actions to federal officials and Congress.
The measure requires the CFPB and the Department of Education to enter into a memorandum of understanding to coordinate complaint handling and to grant the CFPB access to Department systems, records, and contractor‑maintained data. It also sets out definitions, timelines for complaint transfers, privacy safeguards, and mechanics for interagency cooperation, plus a prohibition against using CFPB authorities to collect consumers’ personally identifiable financial records for market monitoring purposes.
At a Glance
What It Does
Creates a CFPB Assistant Director / Student Loan Borrower Advocate who heads a new Office for Students and Young Consumers, gives the office market‑monitoring authorities and limited subpoena‑style reporting powers, and requires an MOU between CFPB and the Department of Education for data access and complaint coordination.
Who It Affects
Directly affects the CFPB and Department of Education; student loan servicers and private education lenders and their contractors; institutions of higher education that offer or arrange consumer financial products for students; and student loan borrowers and families who file complaints.
Why It Matters
The bill centralizes borrower advocacy inside the CFPB and builds a formal information‑sharing channel between two agencies that historically have operated separately, potentially speeding complaint resolution and surfacing marketwide risks — but it also creates new privacy and operational challenges for agencies, servicers, and schools.
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What This Bill Actually Does
The bill rewrites the current private‑education ombudsman provision in the Consumer Financial Protection Act to establish an Assistant Director and Student Loan Borrower Advocate at the CFPB. That official will lead a new Office for Students and Young Consumers focused on outreach, education, market monitoring, and consumer complaint resolution for both private education loans and Federal student loans.
The office is charged with producing annual reports on the student loan marketplace, campus financial products, and risks faced by young consumers, and with making recommendations to agency leaders and Congress.
To make the Advocate operational, the bill requires a memorandum of understanding between the CFPB and the Department of Education (including the Department’s Chief Operating Officer and Student Loan Ombudsman) to be in place within 60 days. The MOU must ensure coordination on borrower assistance and authorize CFPB access to relevant Department information systems, records, and contractor‑maintained data.
Separately, Title II of the bill defines key terms and directs the agencies to set up points of contact, share supervisory and review schedules, meet regularly, and reconcile reporting categories for comparability.On complaint handling, the bill obligates each agency to transfer borrower complaints it receives about the other agency’s jurisdictional products, and it sets a 10‑day deadline for sending complaints that touch both title IV loans and private education loans in specified circumstances. The CFPB gains authority to gather market information—using existing CFPB mechanisms to require reports and written answers from covered entities—while the bill expressly prohibits using that authority to collect consumers’ personally identifiable financial records for market analysis.
The bill also conditions Department contracts for servicing title IV loans on contractors’ agreement to provide the Department’s information to the CFPB on request.The measure tackles data sharing and privacy directly: it amends tax‑information redisclosure language and the Privacy Act to allow the specific interagency disclosures, and it directs the agencies to enter into privacy memoranda of understanding and implement safeguards limiting access to nonpublic information. Finally, the bill is careful to preserve each agency’s existing statutory authorities and permits additional MOUs or procedures to flesh out operational details.
The Five Things You Need to Know
The bill creates an Assistant Director and Student Loan Borrower Advocate at the CFPB who leads an Office for Students and Young Consumers and reports annually on market risks and campus banking arrangements.
It requires the CFPB and the Department of Education to sign a memorandum of understanding within 60 days that authorizes CFPB access to relevant Department systems, records, and contractor‑maintained data.
Agencies must share every student‑borrower complaint they receive with the other agency, and complaints about title IV or private loan origination/servicing must be forwarded to the other agency within 10 days in certain situations.
The CFPB, at the Advocate’s recommendation, may require covered persons and service providers to file annual or special reports and answers under oath, but the bill bars using those authorities to collect consumers’ personally identifiable financial information for market monitoring.
The Department may not contract for title IV loan servicing unless the contractor agrees, as part of the contract, to provide the Department’s required information to the CFPB upon request.
Section-by-Section Breakdown
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Creates the Assistant Director and Office for Students and Young Consumers
This amendment replaces the prior Private Education Loan Ombudsman role with a clearly titled Assistant Director and Student Loan Borrower Advocate appointed by the CFPB Director. The provision establishes an Office for Students and Young Consumers to run outreach, financial education, market analysis, and complaint intake targeted at students, young consumers, and families. Practically, it centralizes borrower advocacy inside CFPB and gives the office a public reporting mandate and the authority to recommend actions to Treasury, Education, and Congress.
Duties, reporting obligations, and market information powers
The Advocate must accept and attempt to resolve complaints involving both private and Federal loans, compile and analyze complaint data, and submit yearly reports: a student‑loan marketplace report, a campus banking report (examining school contracts and revenue sharing), and a report on young consumer risks. For market monitoring, the Advocate can gather information from examination reports, complaints, surveys, and other sources and can recommend that the CFPB require covered entities to file reports or answers. The statute limits the Bureau from using these authorities to collect consumers’ personally identifiable financial information for monitoring purposes.
Department of Education must enter MOU with CFPB
The bill adds a Higher Education Act provision that compels the Secretary, the Department COO, and the Department’s Student Loan Ombudsman to enter into an MOU with the CFPB Advocate within 60 days. That MOU must ensure coordination in assisting borrowers and expressly authorize CFPB access to Department information systems and contractor‑held records — an operational step that opens Department datasets to CFPB use for reporting, supervision, and complaint resolution.
Definitions and detailed cooperation, data‑sharing, and privacy mechanics
Title II supplies precise definitions (e.g., 'nonpublic information,' 'student financial services,' 'provider/receiver') and obligates the agencies to establish points of contact, share supervisory/review schedules, meet quarterly, and align reporting categories. It requires secure, digital complaint sharing, sets a 10‑day transfer deadline for certain cross‑jurisdictional complaints, directs an interagency process for defaulted title IV collection complaints, and amends the Internal Revenue Code and the Privacy Act to permit specific redisclosures and Privacy Act disclosures between the Secretary and the CFPB Advocate. It also mandates memoranda governing data privacy and enumerates safeguards to restrict access to nonpublic information.
Complaint handling, servicer contract condition, costs, and construction
The bill directs the CFPB Advocate to accept and process complaints about private loans and title IV servicing following CFPB complaint procedures, including routing servicer responses to borrowers. The Department may not hire a contractor to service title IV loans unless the contractor agrees to provide the Department’s required information to the CFPB on request. Each agency bears its own costs unless funds transfer is needed, in which case a separate interagency agreement is required. The title also clarifies that nothing here limits either agency’s existing statutory authorities.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Student loan borrowers (including those with both private and title IV loans): gain a single, coordinated point of intake and an Advocate within CFPB to escalate and track complaints across agencies.
- Young consumers and families using campus financial products: will see dedicated annual scrutiny of campus banking deals, revenue sharing, and fees that may surface harmful practices.
- Consumer protection officials and policymakers: receive new, consolidated reporting and market analyses from the Advocate to inform rulemaking and oversight decisions.
Who Bears the Cost
- Department of Education: must execute MOUs, provide access to systems and contractor data, and collaborate on complaint resolution — increasing operational and IT coordination burdens.
- Student loan servicers and contractors (including private collection agencies): face additional information requests, faster complaint escalations, and contractual conditions to provide data to CFPB when servicing title IV loans.
- Institutions of higher education and campus banking vendors: face heightened scrutiny and reporting in the Advocate’s campus banking report, which may prompt compliance costs and renegotiation of vendor contracts.
Key Issues
The Core Tension
The central dilemma is reconciling better borrower outcomes through fast, granular data sharing and coordinated complaint handling with privacy, security, and capacity concerns: opening Department datasets and contractor records helps detect marketwide harms and resolves complaints more efficiently, but it raises implementation costs, legal complexity, and privacy risks that could undercut those very benefits if not tightly managed.
The bill takes a programmatic approach to stronger oversight and faster complaint routing by opening Department of Education systems and contractor data to the CFPB. That access will enhance market monitoring and make complaint handling more efficient, but it relies on timely, secure technical integration and on clear legal authority for redisclosure of protected information.
The statute amends discrete privacy provisions (Tax Code redisclosure and the Privacy Act) and requires memoranda of understanding and safeguards, but implementing secure, auditable transfers of nonpublic information across agencies and contractors is operationally complex and can be costly.
Another tension lies between the Advocate’s authority to require reports from covered entities and the express bar on using that authority to gather consumers’ personally identifiable financial information for market monitoring. The limitation protects consumer privacy but may constrain the Advocate’s ability to run certain analyses that require granular, linkable account‑level data.
The bill also creates overlapping workflows where programmatic resolution (Department responsibilities for title IV program issues) and consumer‑financial law enforcement (CFPB responsibilities) meet; the legislation relies on quarterly coordination and ad‑hoc processes but leaves many dispute‑resolution and escalation mechanisms to future MOUs and agency procedures.
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