Tester Urges Trump Administration’s Top Consumer Watchdog to Protect Service Members from Predatory Lenders
Senator: Stop Undermining Financial Protections for Military Families
(U.S. Senate) – U.S. Senator Jon Tester is calling on the Consumer Financial Protection Bureau (CFPB) to defend service members and their families from predatory lenders after the watchdog agency signaled it will no longer use its authority to actively ensure compliance with the Military Lending Act (MLA).
Tester’s letter to CFPB Director Kathy Kraninger warns that the Trump Administration’s actions are undermining financial protections for military families.
“We urge you to stand up to predatory lenders and stand with service members and their families,” Tester wrote. “We urge you to do your duty and carry out the CFPB’s mission by standing with service members and their families and ensuring that they receive all of the MLA protections they have earned.”
The MLA was passed in 2006 with bipartisan support to help safeguard active-duty military members and their families from financial fraud, predatory loans, and credit gouging. The law caps the annual interest rate for an extension of consumer credit to a service member or his or her dependents at 36 percent. It also strengthens military readiness by helping to prevent unnecessary service member separations caused by predatory lending. According to the Department of Defense, losing a service member due to personal issues, such as financial instability, costs taxpayers and the Department more than $58,000 for each separated service member.
Trump-appointed CFPB officials are now seeking to roll back these consumer protections by halting the examination of financial firms for compliance with the Military Lending Act. At the behest of Trump appointees, the CFPB discontinued the supervision of regulated entities for compliance with the MLA.
“When the CFPB was making every effort to protect service members and their families, its own routine examination of one payday lender uncovered a violation of the MLA, where loans at rates higher than 36 percent were being extended to more than 300 active-duty service members or their dependents,” Tester wrote. “We urge you to continue these examinations in order to pursue the clear bipartisan goals of supporting military readiness, saving taxpayer money, and protecting our service members and their families from predatory lenders.”
Tester has been vocal about his concerns regarding Kraninger and her predecessor Mick Mulvaney’s leadership at the CFPB, taking the two to task over wasteful spending, neglected investigations, and insufficient oversight.
You can read Tester’s full letter to Director Kraninger HERE.