WASHINGTON (WAVY) — When members of the military borrow money from loan companies or get credit cards, a special law protects them from financial abuse. A proposal to change that law has angered both Virginia senators and dozens of their colleagues.
It’s called the Military Lending Act, and it’s enforced by the Consumer Financial Protection Bureau. The Agency says it may roll back some of its enforcement because it may lack the proper authority. The proposal would move away from proactive examinations of lenders, and rely more on service members to report predatory lenders.
The law protects military borrowers with an interest rate cap of 36% on most consumer loans, prohibits forced paycheck deductions to pay loans, and prohibits penalties for prepayment, among other measures.
A letter signed by Sens. Tim Kaine (D-Virginia), Mark Warner (D-Virginia) and 47 other senators urges Acting Director of the CFPB Mick Mulvaney to reconsider.
The letter says the Bureau “should not be abandoning its duty to protect our service members” and the law has been critical in “ensuring the detection and prevention of risks to military consumers.”
Kaine, Warner and the 47 other senators who signed the letter want to know by Monday as to how the law will be enforced moving forward.
All the major bases in Hampton Roads have personnel who can help military members with financial planning.