The head of the Consumer Financial Protection Bureau on Wednesday suggested that college accrediting agencies may fall within the bureau’s jurisdiction.
Responding to Republican criticism of the CFPB’s ongoing investigation involving the accreditation of for-profit colleges, Director Richard Cordray left open the possibility that the consumer bureau would target accrediting agencies themselves.
“Our authority is over those who provide financial products or services, or provide material, substantial assistance to those who do,” he said at an event hosted by Politico’s “Morning Money” newsletter. “If an accrediting agency is facilitating for-profit colleges' misleading consumers, treating them unfairly and deceptively, then that's something that we should look at.”
Cordray added that he would not comment on “any pending enforcement actions of that kind.”
The CFPB in August demanded records of the Accrediting Council for Independent Colleges and Schools, or ACICS, one of the largest national accrediting agencies, which oversees many for-profit colleges. The bureau said it was investigating possible “unlawful acts and practices in connection with accrediting for-profit colleges.”
In denying a request from ACICS to drop that demand for records, the CFPB argued that it had the authority to seek records from the accreditor regardless of whether the accreditor is the target of the investigation, which remains unclear. But the bureau did not address in that document whether it believed college accreditors fall under the federal consumer protection laws that the CFPB enforces.
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