(EDITOR’S NOTE, 12/11/18, 6:31 PM ET: This article has been updated to clarify that the report itself was based on warnings the CFPB issued in 2016 suggesting that banks were overcharging students with college-sponsored financial products.)
The Trump administration’s Consumer Financial Protection Bureau (CFPB) never published a report accusing Wells Fargo of overcharging college students for financial products.
Politico and other groups obtained the report by filing a Freedom of Information Act request with the agency, authored by Seth Frotman, who headed the agency’s student loan ombudsman office. In the report — which analyzed debit cards and financial products offered on more than 500 college campuses across the country — Wells Fargo stands out as the biggest offender, overcharging students more than any other bank.
The report found that 1.3 million students paid more than $27.6 million in fees in just one year, using college-sponsored financial products, like debit cards. Half of all annual fees charged were collected by Wells Fargo, out of 14 financial companies. The megabank is accused of overcharging students with annual fees of up to $50 in the 2016-2017 academic year (the first year such data was made public), which is far more than any of the other banks charged. The comprehensive report is based on data from the CFPB suggesting that colleges may be offering students financial products that come with high fees.
While the Trump administration’s CFPB did not give any justification for not releasing the findings, Frotman wrote in his resignation letter that his superiors at the agency “suppressed the publication” of his report. Frotman resigned in August, accusing then-CFPB director Mick Mulvaney of undermining the mission of the agency.
“The damage you have done to the Bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country,” Frotman wrote to Mulvaney in his resignation letter.
According to Politico, the reason for the suppression of the report may be due to rules put in place by the U.S. Department of Education stipulating that any financial products colleges offer to college students must be in line “with the best financial interests” of students. The CFPB countered that while it didn’t share the data in its annual report on financial products on college campuses, it did share the information with the Department of Education.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.