Elected officials demand more oversight to protect military families from financial abuse
SAN DIEGO (KUSI) — A federal agency that’s supposed to protect military service members from financial abuse is coming under fire.
California Attorney General Xavier Becerra and Congressman Scottt Peters said Wednesday that the Consumer Financial Protection Bureau, known as CFPB is abandoning its obligations to enforce a federal law that protects military families from lending abuses by banks, payday lenders and other creditors.
At a news conference near the USS Midway museum in San Diego, Becerra and Peters sharply criticized CFPB Acting Director Mick Mulvaney for deciding to remove the agency’s oversight of lenders under the provisions of a 2006 law called the Military Lending Act.
That law caps interest rates at 36%, forbids lenders from forcing a consumer into mandatory arbitration and prevents a lender from piling on more penalties and fees for paying a loan back early.
Representative Peters said allowing banks and other lenders to operate without any oversight is a huge mistake and leaves our men and women in the armed services more vulnerable to rip-offs and unfair practices.
Becerra has joined 32 other state Attorney Generals in signing a letter to Mulvaney, in which they condemned the decision to eliminate its oversight of lenders. “It’s not that we don’t have the laws at the federal level to protect our military service members.
It’s that you have a director of the the agency that’s supposed to help protect them, that has gone AWOL and said, “I’m not going to do it,” Becerra said.
The new policy has not yet taken effect. Becerra and Peters are hoping that their bi-partisan appeal will force the head of the CFPB to reconsider his directive.