Consumers First Act

Floor Speech

BREAK IN TRANSCRIPT

Mr. DeSAULNIER. Madam Chair, first of all, let me recognize the chair of the committee, my friend from California, for her steadfast work to defend American consumers.

Madam Chair, students are in a difficult situation nowadays in the knowledge-based economy, where we are told over and over again that America, to be competitive, has to have an educated workforce, and we need more and more young people to go into college and then to graduate school; not to say that we don't have needs for people to get out of high school and go into career tech.

But these generations are burdened with unbelievable student loans, and they are also burdened with, in urban areas, high housing costs and also lower wage expectations. We have to fix this; and one way to fix it is to have more oversight and performance standards for those companies, those for-profit companies, in particular, that control 93 percent of the market of Federal student loans.

Madam Chair, 44 million Americans hold an estimated $1.5 trillion in student debt. Over 1 million borrowers defaulted on their student loans last year.

Default is a financially devastating event that affects the individuals many times for the rest of their lives, as it affects their credit standing and also their ability to get a house, and to get a good job. Default is a financially-devastating event, as I said.

In the past decade, the Federal Government created several repayment plans designed to assist borrowers in financial distress, but the default rate remains stubbornly high.

One major reason is the student loan servicing industry. These for- profit companies operate with little oversight nor accountability.

Evidence shows that servicers often provide inaccurate information and inadequate customer service, making the already complicated process of enrolling in the correct repayment plan close to impossible.

My amendment would simply require the Consumer Financial Protection Bureau to collect and publish data from student loan servicers, providing a first-ever look at how these companies perform at serving American consumers. That is important.

These are basic performance standards that I would think all of my colleagues across the aisle would want in any business practice-- particularly for-profit companies--they would want performance standards for them, if they are publicly-traded they would want them for the shareholders and, most importantly, for American consumers and students.

For example, this amendment would show if student loan servicers are making it easy for their customers to recertify their incomes for their repayment plans. We know that this is a common roadblock to successful repayment.

This amendment would simply require the CFPB to fulfill their statutory duty and provide needed oversight and transparency of this important industry. Everybody should agree that more information, in this instance in particular, is in everyone's interest and everyone's interest in the future of this country and future generations.

BREAK IN TRANSCRIPT

Mr. DeSAULNIER. Madam Chair, just briefly, while I respect some of the issues brought up by my colleague, I do think, if the data is already there and they are supplying it for the Department of Education, we should make it relatively easy for the Consumer Protection Bureau to get that same information and, if needed, get more.

As a former business owner, these are the kind of performance standards I would not be afraid to show to my clients; and I would think that Congress and the American people, considering the importance of this investment, at a minimum, would require these kind of performance standards.

So I would hope that Members on both sides of the aisle would support the effort in a spirit of transparency, and performance standards for privately-held companies.

Madam Chair, I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source