U.S. Sens. Mark Warner and Tim Kaine (both D-VA) joined Sen. Jack Reed (D-RI) and the entire Senate Democratic Caucus in calling for the Consumer Financial Protection Bureau (CFPB) to protect U.S. military personnel and their families from predatory lenders.
In a letter addressed to CFPB Director Kathleen Kraninger, the Senators urged CFPB not to cease checking for compliance with the Military Lending Act (MLA) in the Bureau’s routine lender examinations.
“When the CFPB was making every effort to protect servicemembers and their families, its own routine examination of one payday lender uncovered a violation of the MLA, where loans at rates higher than 36% were being extended to more than 300 active-duty servicemembers or their dependents,” the senators 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 servicemembers and their families from predatory lenders.”
They concluded, “The CFPB should not have to be persuaded to stand up for consumers, especially military consumers and their families who simply do what’s right when asked to protect and defend our nation. We urge you to do your duty and carry out the CFPB’s mission by standing with servicemembers 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 at 36% the annual interest rate for an extension of consumer credit to a servicemember or their dependents. It also strengthens military readiness by helping to preventing unnecessary servicemember separations caused by predatory lending. According to the Department of Defense (DOD), losing a servicemember due to personal issues, such as financial instability, costs taxpayers and DOD more than $58,000 per separated servicemember. In their letter, the Senators also requested that the bureau provide a full justification of its decision put servicemembers at risk.
Sens. Warner and Kaine have previously pressed the administration on this issue, and have been outspoken advocates for Virginia’s active duty military personnel, veterans, and their families. In February, they wrote to the Secretaries of the U.S. Navy, Army, and Air Force, requesting information about military housing contracts with private companies after allegations surfaced of health hazards for military families. They also called on the VA in November to resolve payment issues that threatened to displace veterans from their homes.
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