By Nicole D. Prysby, J.D.
CFPB Director Kathy Kraninger seeks clear authority to supervise compliance in accordance with the Military Lending Act in letter to Congress.
Consumer Financial Protection Bureau Director Kathleen L. Kraninger announced on January 17 that she has asked Congress to grant the CFPB clear authority to supervise for compliance with the Military Lending Act (MLA). The CFPB sent a proposal that would grant it that authority to Speaker of the House Nancy Pelosi for consideration. The proposal would amend the Consumer Financial Protection Act to explicitly state that the CFPB has nonexclusive authority to require reports and conduct examinations to assess compliance with the MLA. The CFPB also sent a copy of the proposal to Vice President Mike Pence.
In Fall 2018, following reports that the CFPB planned to stop ensuring that lenders are complying with the MLA as part of its regular, statutorily mandated supervisory examinations, a number of law enforcement officials, lawmakers, and consumer groups expressed concerns. A coalition of 33 state attorneys general sent a letter to the CFPB urging it to continue protecting military servicemembers against predatory lenders (see Banking and Finance Law Daily, Oct. 24, 2018). Senator Sherrod Brown (D-Ohio) released a minority report to Congress discussing the ways Mick Mulvaney has "undermined" the CFPB and used the CFPB to push the agenda of the financial industry (see Banking and Finance Law Daily, Nov. 29, 2018). In support of his argument, Brown’s report cited the fact that the CFPB suspended examinations to identify violations of the MLA. A consumer group, the Consumer Federation of America, also issued a public statement on the issue. CFA released a report that concluded that the CFPB is legally authorized to include MLA compliance within its supervisory exams under both its enabling statute, the Consumer Financial Protection Act, as well as the MLA itself (see Banking and Finance Law Daily, Nov. 5, 2018).
After Kathy Kraninger was confirmed as Bureau Director in December 2018, the Democratic members of the House Committee on Financial Services urged her to commit, in writing, to resuming a consistent supervisory role over consumer protection laws, including the MLA (see Banking and Finance Law Daily, Dec. 17. 2018). In their letter to Kraninger, the lawmakers charged that during former director Mick Mulvaney’s tenure, the CFPB discontinued enforcement, "neglecting its responsibility under the law to protect servicemembers and their families."
Companies: Consumer Federation of America
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