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Financial Protection for Service Members May Be Weakened by Administration

Financial Protection for Service Members May Be Weakened by Administration

 

Financial Protection for Service Members May Be Weakened by Administration

Contributed by Debbie Gregory

Senate Democrats have called on Consumer Financial Protection Bureau (CFPB) Acting Director Mick Mulvaney to commit to upholding servicemember protections under the Military Lending Act (MLA) after rumors circulated that the Trump administration is trying to get rid of the decade-old act.

In their letter to Mulvaney, the 49 senators wrote, “The CFPB should not be abandoning its duty to protect our servicemembers and their families, and we seek your commitment that you will utilize all of the authorities available to the CFPB to ensure that servicemembers and their families continue to receive all of their MLA protections.”

The MLA was established in 2006 and was designed to protect service members and their spouses, children, and certain other dependents from financial fraud, predatory loans, and credit gouging. Under the law, the annual interest rate for an extension of consumer credit to a servicemember or his or her dependents is capped at 36%.

The letter continued, “In addition, for our servicemembers, especially those who are deployed overseas facing hostile fire, it is unreasonable to place the burden of detecting and reporting MLA abuses on servicemembers, especially when they should be given every opportunity to focus squarely on their missions. What the CFPB is reported to be contemplating is equivalent to forcing our armed forces to stop using radar, sonar, and other early warning technologies and instead react to threats as they occur. No one would force our armed forces to do so, and the CFPB should not similarly force any of its examiners to turn a blind eye.”

“For generations, Americans have set partisanship aside and have made every effort to provide servicemembers and their families with all the resources and protections they deserve. We ask no less of you and, as such, seek your commitment that you will continue the CFPB’s tradition of ensuring that servicemembers and their families receive all of their MLA protections by utilizing all of the authorities available to the CFPB.”

Senate Democrats created the Office of Servicemember Affairs at the CFPB to serve as an independent watchdog for military personnel. Since its inception, the office has handled more than 90,000 consumer complaints from servicemembers and their families and taken action to help return hundreds of millions into the pockets of servicemembers affected by harmful practices.