A group of 49 U.S. senators is urging the Trump Administration not to halt routine examinations of lenders for violations of the Military Lending Act.
In a letter to Office of Management and Budget Director Mick Mulvaney, the senators expressed concerns that the Consumer Financial Protection Bureau (CFPB) will no longer include the Military Lending Act (MLA) as part of the CFPB’s routine lender examinations.
By doing so, soldiers and their families would be more susceptible to abusive financial practices, the senators said.
“These reports are puzzling because the CFPB already possesses the authority to enforce the MLA and examine many types of lenders for the purposes of ‘detecting and assessing risks to consumers and to markets for consumer financial products and services.’” The 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 Military Lending Act was enacted in 2006 to safeguard active-duty military members and their families from financial fraud, predatory loans, and credit gouging. Specifically, the law caps the annual interest rate for an extension of consumer credit to a servicemember or his or her dependents at 36 percent, among other provisions.
The senators requested that the CFPB not to halt military lending checks.
The Office of Servicemember Affairs at the CFPB has handled more than 90,000 consumer complaints from servicemembers and their families and take steps to return hundreds of millions into the pockets of servicemembers affected by harmful practices.
The letter follows a New York Times report last week that said that the Administration is planning to suspend routine examinations of lenders for violations of the Military Lending Act. The article said the CFPB intended to do away with supervisory examinations of lenders.