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Politics & MoneyMortgage

Senate Democrats push CFPB to retain oversight of military lending

Send letter in defense of Military Lending Act

Senate Democrats continue to push back against a decision by the Consumer Financial Protection Bureau to stop supervising lending made to active duty service members.

Currently, the CFPB actively examines lenders’ records in order to ensure they comply with the Military Lending Act, an act which protects military service members from predatory lending, however now, the bureau is looking to change that.

Under the proposed changes, the CFPB would rely solely on complaints from service members and their families to trigger investigations. CFPB Acting Director Mick Mulvaney reportedly expressed that the bureau has overstepped its authority by proactively looking into cases against military members without receiving complaints.

And now, 49 senators are calling on the CFPB to continue actively supervising lenders to ensure they are complying with the Military Lending Act.

Thursday, Ranking Member of the Armed Services Committee Sen. Jack Reed, D-R.I., along with 48 other senators, sent a letter to Mulvaney in an effort to protect soldiers from abusive financial practices.

From the letter:

We write regarding reports that the Consumer Financial Protection Bureau (CFPB) will no longer protect servicemembers and their families by including the Military Lending Act (MLA) as part of the CFPB’s routine lender examinations due to a purported lack of authority.  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 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.

And several experts have stepped up to applaud the efforts of these senators, saying predatory lenders seek to target military members and pull them into death traps.

“Given the opportunity, predatory lenders will target military service members and pull them into horrific debt traps,” said Scott Astrada, Center for Responsible Lending federal advocacy director. “The bipartisan Military Lending Act has helped put an end to these shameful practices. We applaud these senators for calling on the CFPB to fulfill its obligation of stopping loan sharks from preying upon service members and their families.”

The letter was signed by all Senate Democrats and one Independent, Sen. Bernie Sanders, I-Vt.

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