Kraninger writes Pence, Pelosi in seeking Military Lending Act supervisory authority

The director of the federal consumer financial protection agency sent House Speaker Nancy Pelosi, Vice President Mike Pence and key House and Senate Committees draft legislation Thursday that she says would give her agency clear authority to supervise for compliance with the Military Lending Act (MLA).

The draft legislative language was transmitted by Consumer Financial Protection Bureau (CFPB) Director Kathleen (“Kathy”) Kraninger in letters to Pelosi and Pence (in his capacity as president of the Senate) and shared with the chairs and ranking members of the Senate Banking Committee and House Financial Services Committee.

In a statement, 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 … The requested authority would complement the work the Bureau currently does to enforce the MLA.”

The bureau director also nodded to H.R. 442, introduced Jan. 10 by Rep. Andy Barr, R-Ky., to specify the agency’s authority to supervise for MLA compliance. “My hope is that bipartisan legislation advances as quickly as possible in the 116th Congress,” she said.

The Military Lending Act is implemented under regulations set by the Department of Defense (DoD) and enforced by federal financial regulators. It applies a military annual percentage rate (MAPR) that a creditor may charge service members to a maximum of 36% and prescribes disclosures and other consumer protections.

As reported last year, then-Acting Director John (“Mick”) Mulvaney said the bureau would cease conducting MLA supervisory exams of lenders because it lacked specific authority to do so, raising the objections of congressional Democrats. Last month, House Financial Services Committee Democrats, led by the then-ranking member Maxine Waters (D-Calif.), now chairwoman of the panel, wrote Kraninger to urge a reversal of that stance.

“Consumer Bureau officials have visited at least 176 military installations or units since 2011,” the lawmakers said in their Dec. 14 letter. “According to the Consumer Bureau’s transparent consumer complaint database, more than 109,000 complaints have been made by servicemembers, veterans, and their families about various financial services and products since 2011.” In that period, they noted, the bureau has won about $130 million in relief for them through enforcement.

“Despite these enforcement actions,” they wrote, “unscrupulous actors continue to target servicemembers. From 2016 to 2017, there was a 47% increase in complaints filed by servicemembers, veterans and their families.”

Consumer Financial Protection Bureau Asks Congress for Clear Authority to Supervise for Compliance with the Military Lending Act

Transmittal to Pence

Transmittal to Pelosi

Dec. 14, 2018, letter to Kraninger from HFSC Democrats