Viewers of the Fox Business Network-hosted Republican presidential debate this evening will repeatedly see an advertisement that casts a relatively obscure consumer protection agency as a power-hungry government office “controlling your decisions” and denying “those who need help the most.”
The advertisement portrays the Consumer Financial Protection Bureau as a roomful of bureaucratic automatons mercilessly stamping “DENIED” on loan applications, beneath Soviet-style banners depicting CFPB’s director, Richard Cordray, and its principal architect, Sen. Elizabeth Warren, D-Mass.
But the ad does not disclose that the group sponsoring it is led by lobbyists for Navient, a student loan company that the CFPB is currently investigating for allegedly cheating student loan borrowers.
View the television spot below:
The Consumer Financial Protection Bureau is the independent agency created by the Dodd-Frank financial reform law and tasked with enforcing consumer protection rules. After targeting subprime lenders and abusive debt collection practices, the bureau has recently stepped up action on issues relating to the student loan industry.
The American Action Network, the sponsor of the advertisement, is led by a team of lobbyists employed to beat back consumer protection regulations on behalf of industry clients. American Action Network board member Vin Weber is a lobbyist at Mercury LLC, where he is registered to work as a Navient lobbyist. On his registration forms, Weber says he specifically works on matters related to the CFPB.
Weber’s colleague on the board, Tom Reynolds, is also a registered lobbyist for Navient through the law firm Nixon Peabody. And another American Action Network board member, Barry Jackson, works with Brownstein Hyatt Farber Shreck, a lobbying firm that serves a number of student loan and payday lending firms on issues relating to the CFPB.
Navient processes federal student loans and works to collect on student debt. Formerly known as Sallie Mae, Navient spun off as a separate company in 2014. The company says it is responsible for managing $300 billion in student loans.
In August, Navient informed investors that the CFPB, after a multi-year investigation of the firm, had found evidence that Navient is in violation of consumer protection laws and may soon face a lawsuit from the agency. Separate investigations have faulted Navient for misleading borrowers on a range of issues, while seeking to maximize penalties and late fees.
The American Action Network has long served as a tool for corporate interests seeking to pursue political goals while minimizing scrutiny. The group is organized as a 501(c)(4) and is thus not required to disclose any donor information. The health insurance company Aetna inadvertently revealed that it had given $3 million to the American Action Network as the group launched an unprecedented series of election advertisements against congressional Democrats.
The group’s plan to spend $500,000 on the anti-CFPB ad campaign is being hailed by industry sources. SubPrime, a trade publication that serves the lending industry, says, “Dealership principals and finance company executives who might be watching tonight’s fourth Republican presidential primary debate … might not want to step away during a commercial break.”
[Update at 10:40 a.m., Nov. 11, 2015: Patricia Nash Christel, vice president for corporate communications at Navient, emails The Intercept: “Navient had zero involvement in the ads or any efforts regarding the ads. To imply otherwise is completely false.” She also said Navient does not fund American Action Network. ]
Top photo: Screen grab from the American Action Network advertisement, YouTube.
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