After Trump Officials at CFPB Declined to Shield U.S. Troops from Abusive Lending Practices, Biden Administration Announces It Will Resume Key MLA Protections
WASHINGTON, DC -- After former Consumer Financial Protection Bureau (CFPB) Acting Director Mick Mulvaney and Director Kathy Kraninger essentially halted the Bureau’s examination of financial firms for compliance with key aspects of the Military Lending Act (MLA) for several years, the CFPB is pulling an ‘about face,’ and U.S. Senator Jack Reed (D-RI) says it is ‘forward march’ to once again protect military families from abusive financial practices under new CFPB leadership.
Reed says he has been informed that the official policy of the CFPB is to supervise lenders with regard to the Military Lending Act. Additionally, the CFPB will rescind public statements conveying a relaxed approach to enforcement of the laws in our care.
“This is great news for our troops and their families. The Military Lending Act makes an enormous difference for active duty members of the military, and I am pleased the CFPB will fully uphold the law once more and use the tools at their disposal to shield our troops from abusive practices,” said Reed, the top Democrat on the Senate Armed Services Committee and a senior member of the Banking, Housing, and Urban Affairs Committee, who has long urged the CFPB to carry out its mission by standing with servicemembers and their families and ensuring they receive all of the MLA protections they have earned.
Under the Trump Administration, both Mick Mulvaney and Director Kraninger disregarded the facts and claimed that the CFPB lacked authority to conduct MLA exams. On their watch, the CFPB largely declined to use its authority and tools to actively protect U.S. military personnel and their families from predatory lenders and ensure compliance with the MLA. The Trump Administration sided with payday lenders and financial lobbyists who wanted to withhold MLA supervision as a mechanism to amend the law and thereby weaken its 36% annual percentage rate cap for military personnel on consumer loans.
Earlier this month, Senator Reed and 28 colleagues sent a letter requesting this action. And over 20 organizations that advocate for military families supported the move.