FOR IMMEDIATE RELEASE: August 24, 2018
In letter to CFPB head and Defense Secretary, diverse cohort presses officials to reverse plan to undermine enforcement of the Military Lending Act
WASHINGTON, D.C. – Today, dozens of consumer, civil rights, and community organizations sent a letter to Consumer Financial Protection Bureau (CFPB) head Mick Mulvaney and Secretary of Defense James Mattis urging the CFPB to reverse its decision to weaken protections for servicemembers and their families against predatory lenders and urging the Department of Defense. The coalition letter, linked here, is in response to the news that the CFPB will halt oversight of payday, car title, and other lenders for violations of the Military Lending Act.
The Stop the Debt Trap campaign lauded the coalition letter and the surging opposition (see below) to the administration’s efforts to weaken consumer protections. The letter states, in part:
We believe violations of the Military Lending Act’s protections, including its limitation of interest rates to no more than 36 percent APR, pose a significant risk of harm to our nation’s military families…Now, by excluding MLA compliance from the supervision of payday and other lenders, the Bureau is sending a clear signal to servicemembers that they are on their own and are responsible for identifying illegal practices – in addition to defending our nation.This step would, in effect, direct examiners to intentionally ignore violations of the MLA uncovered when examining lenders for compliance with other consumer financial protection laws. The Bureau risks creating a two-tier system: full examination and enforcement of consumer protection laws for civilians, and a second tier of complaint-driven enforcement for members of the military.
Yesterday, the Senate Banking Committee voted to advance the nomination of Kathy Kraninger, who has stated that she “cannot identify any actions that Acting Director Mulvaney has taken with which I disagree.” Also yesterday, 38 veterans and military service organizations released a letter and held a press call pushing for the CFPB and DoD to stop the rollback of servicemembers’ rights under the Military Lending Act, warning that military families “suffer harm when predatory lenders target them with financial fraud and extremely high interest rates.” Last week, 49 Senators urged the administration in a letter “not to abandon its duty to protect our servicemembers and their families” as required by the MLA. Meanwhile, criticism of the proposal has grown to a groundswell.
The Stop the Debt Trap campaign is comprised of more than 500 civil rights, consumer, labor, faith, veterans, seniors and community organizations from all 50 states.