Dear Mr. Mulvaney,
We are writing in response to reports that the Consumer Financial Protection Bureau (CFPB) will exclude the Military Lending Act (MLA) from its routine examinations of lenders, weakening critical protections for servicemembers and their families. This is troubling because the CFPB currently has the supervisory, examination, and enforcement authority it needs to oversee institutions under its jurisdiction and ensure they are in full compliance with the MLA. Accordingly, we join our colleagues in the Senate, over a dozen Members of the House Armed Services Committee, and the more than forty military and veterans service organizations, urging you to ensure that active duty servicemembers and their families continue to receive all their due MLA protections.
When Congress passed the MLA, the issue was clear: high-cost and predatory lending is a risk to servicemembers and military readiness. Department of Defense (DOD) studies have found servicemembers and their families are disproportionately targeted by predatory lending practices and determined that these practices pose a significant risk to our national security. The MLA curtailed these unjust practices, and Congress further gave the CFPB responsibility for regular supervisory examinations of lenders and institutions, checking to ensure soldiers' financial protections are maintained. Among the protections included in the MLA was capping the annual interest rate servicemembers and their families could be charged at 36%. Shifting the burden of detecting and reporting MLA abuses or violations to the brave men and women serving our country, many of whom are overseas, rather than the very regulators who should be serving as sentries to protect those who protect us, is unreasonable and unnecessary.
The CFPB should utilize all of its authorities and continue to provide vigilant, effective consumer protection for our men and women in uniform. We therefore urge you to recommit the CFPB to protecting servicemembers and their families by continuing to include the MLA as part of the CFPB's routine examinations of lenders.