Consumer Financial Protection Bureau (CFPB) officials said the agency will resume Military Lending Act (MLA)-related examination activities as a means of addressing risks to active duty servicemembers and dependents.
Three years ago, the CFPB’s leadership discontinued MLA-related examination activities based upon the belief Congress did not specifically confer MLA-centric examination authority on the CFPB.
“The Military Lending Act is an essential law protecting the finances of our military families, and we are excited to announce this rule change prior to July, which is Military Consumer Month,” CFPB Acting Director Dave Uejio said. “Through our enforcement of the MLA, companies that harmed military borrowers have been ordered to pay millions of dollars in redress and civil penalties. To fulfill its purpose and protect military borrowers, we must supervise financial institutions and hold them accountable for endangering consumers.”
MLA features, per authorities, include the ability to limit the annual percentage rate on many loans to military borrowers to a maximum of 36 percent; prohibit lenders from requiring military borrowers to arbitrate disputes; prohibiting lenders from requiring military borrowers to waive their rights under any state or federal law; and prohibiting lenders from requiring military borrowers to use a military allotment to repay a loan.
“This decision affirms the CFPB’s ongoing commitment to the financial protection of our servicemembers and their families,” Jim Rice, assistant director for the CFPB’s Office of Servicemember Affairs, said.