US Consumer Financial Protection Bureau (CFPB) director Kathleen Kraninger has asked the US Congress to provide the CFPB with ‘clear authority to supervise compliance’ of the Military Lending Act (MLA).
The MLA was initially released in 2006 and provides certain protections for active-duty servicemembers and their families when taking out loans.
Under the regulation, they are not allowed to be charged over 36 per cent Military Annual Percentage Rate. Calculating this interest rate includes finance charges, credit insurance premiums or fees, add-on products sold alongside the credit and other fees, such as for application.
Other protections include no pre-payment penalties, no mandatory allotments when taking out a loan, and there is no mandatory waiver of consumer protection laws.
CFPB director Kathleen Kraninger said, “The Bureau is committed to the financial well-being of America’s service members. This commitment includes ensuring that lenders subject to our jurisdiction comply with the Military Lending Act so our service members and their families are provided with the protections of that law.
“That’s why I have asked Congress to explicitly grant the Bureau authority to conduct examinations specifically intended to review compliance with the MLA. The requested authority would complement the work the Bureau currently does to enforce the MLA.
“I was pleased to see legislation proposed recently in the House of Representatives (H.R. 442) that is intended to grant the Bureau such authority. My hope is that bipartisan legislation advances as quickly as possible in the 116th Congress.”
The CFPB has presented a proposal to the speaker of the U.S. House of Representatives and the vice president and has also provided copies to chairs and ranking members of the Senate Committee.
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