Attorney General Mark Herring today called on the Consumer Financial Protection Bureau and Acting Director Mick Mulvaney to continue protecting military servicemembers against predatory lenders under the Military Lending Act.
In a letter to the CFPB and Director Mulvaney, Attorney General Herring and a bipartisan coalition of 32 other attorneys general urge the CFPB to reconsider its reported decision to stop examining lenders to ensure they are complying with the MLA.
“It’s hard to believe, but there are shady businesses and lenders who will actually target military servicemembers because they have a steady, albeit modest income, and are often away from home for training or deployment,” said Attorney General Herring. “State and federal law provide important protections for our servicemembers and their families, but those protections are only valuable if they’re enforced. As the attorney general of a state with a huge military and veteran population, I’m extremely concerned about reports that the CFPB under Mick Mulvaney is planning to weaken oversight and protections afforded to our military members. I understand that the Trump administration dislikes the CFPB, but I hope their disdain won’t lead them to abandon our servicemembers over it. I’m going to do all I can to keep our servicemembers and veterans safe from financial exploitation, and I hope I’ll be able to count on our federal partners to do the same.”
The MLA, enacted in 2006, protects military servicemembers and their families against exploitative lenders and loans so that servicemembers aren’t overburdened with debt. The CFPB has the authority to examine lenders’ compliance with the MLA to detect potential risks to consumers and ensure that military servicemembers aren’t being offered illegal loans. This is especially important for younger servicemembers who have less experience managing their own finances and may be more vulnerable to predatory loans.
Approximately 60 percent of military families report experiencing stress related to their financial condition. Servicemembers in financial distress may have their security clearances revoked and be compelled to leave the military, resulting in the loss of well-trained servicemembers and additional financial burdens for the military.
Attorney General Herring has made the needs of military servicemembers, families, and veterans a priority of his revamped Consumer Protection Unit which has recovered more than $246 million in consumer relief and payments from violators since 2014.
He has taken major action to protect veterans and military from exploitation, including a lawsuit against Future Income Payments and its owner for selling illegal, predatory, high-interest loans to retired military members and civil servants. He and his team also won the largest multistate settlement ever led by Virginia against USA Discounters, resulting in approximately $100 million debt relief and compensation for veterans and military families, including $27.4 million for thousands of Virginia consumers, who were abused by the retailer’s lending and debt collection practices.
The USA Discounters settlement followed a similar action against Freedom Furniture that secured millions in relief for veterans and military families who were victims of illegal debt collection tactics.
In 2017, Attorney General Herring launched the “Virginia Military and Veteran Legal Resource Guide,” a comprehensive guide to help veterans and military families understand their employment rights, consumer protection resources, educational and tax rights and benefits, voting rights and more. The Guide is available at every Department of Veterans Services Benefits Office, every Virginia Community College System Campus, the military assistance provider at every four year college and university, and online at www.VaMilGuide.com.
Attorney General Herring is joined in sending this letter by the Attorneys General of Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Vermont, Virgin Islands, Washington, and Wyoming.
Share
AFP
