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Politics & MoneyMortgage

CFPB seeking compliance authority on military lending

Bureau asks Congress for "clear authority to supervise" military lending compliance

The Consumer Financial Protection Bureau is changing course on its previous decision to stop supervising lending to active duty service members.

Kathy Kraninger, the recently confirmed director of the bureau, sent a letter to Congress on Thursday, asking for “clear authority” to supervise for compliance with the Military Lending Act.

This turnaround comes several months after Mick Mulvaney, who served as acting director of the CFPB prior to Kraninger’s confirmation, decided that the bureau would stop supervising lending made to active duty service members. Much to the dismay of congressional Democrats, who pushed the CFPB to retain oversight. 

Under Mulvaney’s changes, the CFPB relied solely on complaints from service members and their families to trigger investigations. Mulvaney had reportedly expressed that the bureau had overstepped its authority by proactively looking into cases against military members without receiving complaints.

Now, Kraninger has sent a proposal to clarify the CFPB’s authority to supervise compliance with the Military Lending Act to Vice President Mike Pence and Speaker of the House Nancy Pelosi.

The proposal outlines a case for spelling out clearly what authority the CFPB would have over supervising military lending and proposes amending several sections of the Consumer Financial Protection Act of 2010 to outline that, according to the draft, “the Bureau shall have nonexclusive authority to require reports and conduct examinations” in regard to lending to military service members.

“The Bureau is committed to the financial well-being of America’s service members. This commitment includes ensuring that lenders subject to our jurisdiction comply with the Military Lending Act so our service members and their families are provided with the protections of that law. That’s why I have asked Congress to explicitly grant the Bureau authority to conduct examinations specifically intended to review compliance with the MLA,” Kraninger said in a statement, adding: “The requested authority would complement the work the Bureau currently does to enforce the MLA. I was pleased to see legislation proposed recently in the House of Representatives (H.R. 442) that is intended to grant the Bureau such authority. My hope is that bipartisan legislation advances as quickly as possible in the 116th Congress.”

This latest proposal from Kraninger indicates she’s steering the ship of the CFPB differently than her predecessor. This isn’t the first time Kraninger has back-pedaled a decision made by Mulvaney. When she took over at the bureau, Kraninger halted the name-change debacle that plagued the agency for months.

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