New Military Lending Act Rules to #StopTheDebtTrap

On July 21st, The Obama Administration and the Department of Defense finalized new Military Lending Act rules to #StopTheDebtTrap for service members.

Men and women in uniform are too often the targets of abusive lending practices. New protections will prevent payday, auto title and other high cost abusive lenders from digging our service members into a debt trap that can put their security clearance and careers at risk.

What People Are Saying

…some of the worst abusers, like payday lenders, are exploiting loopholes to trap our troops in a vicious cycle of crushing debt. So today we’re taking a new step. The DOD is closing those loopholes so we can protect our men and women in uniform from these predatory lenders.

President Barack Obama
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With this action, the department takes an important stand against companies that can prey on our men and women in uniform. This new rule addresses a range of credit products that previously escaped the scope of the regulation, compromising the financial readiness of our troops.

Bob Work, Deputy Secretary of Defense
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This is a significant win for our troops and their families. Predatory lending is a threat to military readiness and therefore our national security, and frankly these commonsense protections are long overdue.

Senator Jack Reed (Rhode Island) – Ranking Member, Senate Armed Services Committee
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Predatory lenders are undermining the strength of our military by threatening the economic future of our servicemembers,” Senator Durbin said. “I am glad to see the Department of Defense take action today to better protect military families from exploitation and unfair lending practices–it’s the right thing to do.

Senator Dick Durbin (Illinois), Assistant Majority Leader
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For too long, payday lenders and shadowy financial operators in Ohio have dodged consumer protections, including safeguards for servicemembers and their families. These critical new protections will crack down on predatory and deceptive lending practices that target military families with outrageous interest rates and often trap them in a lifetime of debt.

Senator Sherrod Brown (Ohio), Ranking Member, Senate Banking, Housing, and Urban Affairs Committee

When I drive down the strip outside a military installation and count 20 fast-cash lenders in less than 4 miles, that’s not a convenience, that’s a problem. I commend Secretary Carter for taking this important step to make the Military Lending Act more effective.

Holly Petraeus, Assistant Director of Servicemember, Affairs Consumer Financial Protection Bureau
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For too long, lenders have put an unacceptable strain on military families though high-cost loans.

Jeff Zients – White House National Economic Council Director
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The Defense Department’s revised rule implementing the Military Lending Act is a major victory for members of our nation’s military – and for the credit unions that serve military families at home and abroad.

Debbie Matz, Chairman – National Credit Union Administration
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Our men and women in uniform deserve to be protected from harmful financial practices and today’s rules are a significant step forward.

Congressman Mark Takai (Hawaii)
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Consumer Groups Statements