The Consumer Financial Protection Bureau (CFPB) recently announced plans to end supervisory examinations for Military Lending Act (MLA) violations.
The MLA, established by Congress in 2006, is a statute designed to protect military service members and their families from predatory lending as it was discovered these loans were undermining the morale, financial stability, and general readiness of military personnel. The MLA caps the interest on all loans made to service members and their families at 36 percent.
Since 2012, the CFPB has been responsible for supervisory examinations of banks, lenders, and other financial institutions to ensure MLA compliance. However, the CFPB has chosen to relinquish its role as supervisor of MLA provisions.
To read a full legal analysis of what this change means for military personnel, their families, and predatory lending, click here.