New Agency Action Weakens Enforcement of Law Designed to Protect Servicemembers From Dangerous and Unlawful Financial Practices
Washington, DC— Today, Democracy Forward and the Military Officers Association of America filed a Freedom of Information Act (FOIA) request with the Consumer Financial Protection Bureau (CFPB) seeking documents showing how the CFPB is failing servicemembers by refusing to ensure that financial institutions are complying with their obligations under the Military Lending Act (MLA). The request follows reporting that the Trump Administration is planning to suspend its examinations of lender compliance with the MLA.
The MLA is a vital law that provides needed protection for servicemembers and their families from predatory lending practices, such as prepayment penalties, contracts that waive consumer protections, and mandatory allotments. By suspending examinations, the CFPB has put servicemembers at serious risk of being victimized by these predatory practices.
CFPB’s action appears to be contrary to the stated views of the Department of Defense (DOD), with whom CFPB shares responsibility for administering the MLA. DOD Acting Assistant Secretary for Manpower and Reserve Affairs Stephanie Barna wrote in a letter to Members of Congress that supervisory examinations contribute to effective industry compliance with the MLA. The internal disagreement within the Trump Administration raises serious questions about who decided to halt the examinations, and why.
“If the Trump Administration is abandoning military families to the loan sharks, we intend to discover why,” said Democracy Forward Executive Director Anne Harkavy. “The CFPB is supposed to police lenders who exploit servicemembers for profit, not make it easier for them to do so.”
The FOIA request was sent to the Consumer Financial Protection Bureau. The Bureau has 20 business days to provide the requested documents.
Democracy Forward is a nonprofit legal organization that scrutinizes Executive Branch activity across policy areas, represents clients in litigation to challenge unlawful actions, and educates the public when the White House or federal agencies break the law.
The Military Officers Association of America is a nonprofit military service organization whose mission is to advocate for military and veteran benefits issues and was instrumental in the passage of the Military Lending Act.