By Lisa Lambert
WASHINGTON (Reuters) - The U.S. consumer financial watchdog on Thursday attempted to repel a Trump-administration attack on former President Barack Obama's sweeping student loan reforms and defended itself against Republican attempts to weaken its powers.
In a lengthy letter to Education Secretary Betsy DeVos, the Consumer Financial Protection Bureau (CFPB) said it had complied with its remit, despite her department's charges to the contrary.
The Education Department announced last week it would no longer work with the bureau on resolving student loan complaints, saying it had complicated the lending process "with potentially inaccurate and inconsistent directives."
It said the consumer bureau, created after the 2007-09 financial crisis to protect individuals from predatory lending, was not honoring an agreement to promptly refer complaints to the department, but using the department's data "to expand its jurisdiction into areas that Congress never envisioned."
The Obama-appointed head of the watchdog, Democrat Richard Cordray, said the bureau shares complaint information in "near real-time" through an on-line portal with the department.
It has "not exceeded its authority," and only fulfilled its mission under federal law to monitor and respond to individuals' complaints about debts as well as enforce federal consumer law, Cordray wrote.
Congress created the bureau in part to mediate between consumers and credit card companies, banks, mortgage providers and other lenders.
The dispute goes beyond a mere territory fight.
Republicans revile the CFPB, saying it reaches too far in its rules and enforcement and should be more accountable to lawmakers. Democrats have said it helps ensure fair treatment for middle-class people unable to fight fraud on their own.
Republicans also disapprove of Obama's attempt to make college more affordable by moving almost all of the $1.4 trillion student-loan industry into the federal government. Currently, only servicing is handled outside the Education Department.
During last year's elections, Trump and fellow Republicans promised to "get government out of the business of lending" and DeVos is now working to return much of the process to the private sector.
She also wants to redo other Obama-era regulations, such as protections for sexual-assault victims on college campuses.
DeVos critics consider the department's split from the CFPB as a way to protect for-profit schools, debt collectors and servicers from government intervention.
Earlier this year the bureau, which has received nearly 20,000 complaints about student loan servicers since February 2016, sued the country's largest servicer Navient Corp for systematically failing borrowers. Navient disputes the allegations and is contesting them in court.
(Reporting by Lisa Lambert, Editing by Rosalba O'Brien)