The Consumer Financial Protection Bureau's decision to stop examining financial firms for compliance with the Military Lending Act has sparked pushback not only from lawmakers and consumer advocates but also from the Defense Department and every major group representing military service members.
Acting CFPB Director Mick Mulvaney's claim that the Dodd-Frank Act does not give the bureau statutory authority to enforce the Military Lending Act is a major reversal from the Obama administration. As reported by several news outlets, Mulvaney has argued further legislation is needed to provide that authority.
But roughly 30 military and veterans groups are opposed to the supervisory rollback. The Department of Defense says it was not consulted on the bureau’s decision and remains committed to the current law, which imposes a 36% annual percentage interest rate cap for active-duty military members and their dependents.
"The Department believes that the full spectrum of tools, including supervisory examinations, contribute to effective industry education about, and compliance with, the MLA,” wrote Stephanie Barna, the acting assistant secretary of Defense for manpower and reserve affairs, in a September letter to Sen. Bill Nelson, D-Fla.
Read more in American Banker.