House Democrats Push Kraninger on MLA Supervision
Twenty-three Democrats on the House Financial Services Committee sent a letter to Kathy Kraninger, the newly-installed director of the Consumer Financial Protection Bureau (CFPB), urging her to reinstate supervisory examinations to ensure compliance with the Military Lending Act (MLA).
“We write you to express our deep concerns that the [CFPB] has recently decided to cease supervising its regulated entities for compliance with the [MLA],” said the letter. “We write to seek your written commitment that you will promptly ensure that the [CFPB] fulfills its explicit statutory purpose and mandates by resuming a consistent supervisory role over consumer protection laws, including the MLA, for the most robust and efficient protection of service members and their families.”
The letter indicated that proactive supervisory examinations were needed because bad actors in the financial services sector continue to target military personnel. “From 2016 to 2017, there was a 47 percent increase in complaints filed by servicemembers, veterans and their families,” said the letter. “Thus, we believe it would be wrong and contrary to the [CFPB’s] statutory mission to reduce oversight of its regulated entities, particularly for this vulnerable population.”
The MLA imposes a 36 percent interest rate cap on loans and bans mandatory arbitration for active-duty military borrowers. In August, reports indicated that Mick Mulvaney, then acting director of the CFPB, planned to scrap supervisory examinations, but would continue bringing individual cases against companies suspected of violating MLA. Mulvaney argued that the supervisory exams were not explicitly laid out in Congressional legislation.
The letter included Maxine Waters (D-CA-43), the next likely Chairperson of the House Financial Services Committee. The letter is a strong indicator that Rep. Waters plans to wield the power of the committee to pressure the CFPB in reinstating supervisory examinations for MLA compliance.