The Consumer Financial Protection Bureau (CFPB) announced plans Jan. 28 to restart supervisory exams targeting military lenders – a way to ensure compliance with the Military Lending Act and protect servicemembers from predatory practices.
This victory for military consumer protections came just a day after MOAA and 23 military and veterans’ organizations sent a letter to President Joe Biden asking for this policy to be restarted. MOAA also called for this policy in a letter to President Biden about priorities for the first 100 days.
CFPB Acting Director Dave Uejio announced the move along with several other changes to help consumers dealing with challenges from the pandemic.
“MOAA is committed to ensuring our servicemembers have financial protections so they can keep focused on the mission of defending our nation," said Lt. Gen. Dana Atkins, USAF (Ret), MOAA's President and CEO. "We applaud the CFPB for taking quick action to reinstate the supervisory examinations to ensure compliance with the Military Lending Act."
Supervisory MLA exams assess whether financial institutions are in compliance with MLA regulations and allow businesses to fix issues without incurring steep penalties. These exams are good for the military community and for businesses.
[FROM MILITARY ONESOURCE: Military Lending Act FAQs]
On Jan. 19, CFPB settled with LendUp Loans, LLC, for MLA violations. Following complaints and a CFPB investigation, the company was required to pay $300,000 in redress to consumers and a $950,000 penalty for its violations.
The reinstatement of the supervisory exam policy is welcome. The exams stopped in 2019, to the dismay of MOAA and many other military service organizations. The CFPB is a vital agency protecting the military, and the exams offer one more tool to help protect those who serve.