WASHINGTON — House Democrats are calling on the new head of the Consumer Financial Protection Bureau to commit to supervising firms for compliance with the Military Lending Act, months after the agency's then-acting leader had claimed the bureau lacked such supervisory authority.
The 22 Democrats, led by likely incoming House Financial Services Committee Chair Maxine Waters, D-Calif., sent a letter to newly sworn-in CFPB Director Kathy Kraninger in which they argued the agency's examination authority is clear.
“We write to seek your written commitment that you will promptly ensure that the Consumer Bureau 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 servicemembers and their families,” they wrote in the letter Friday.
The letter was an early signal from Waters that she plans to hold the CFPB accountable for its mission of protecting consumers under Kraninger's leaderhip.
“There is no question the Consumer Bureau has the authority and the responsibility to supervise its regulated entities for compliance with the MLA,” the letter adds.
The letter comes less than a week into Kraninger’s five-year term as the permanent director of the CFPB.
Former acting CFPB Director Mick Mulvaney, who also serves as President Trump’s budget director, had indicated plans to halt supervising financial firms for compliance with the Military Lending Act, claiming that the Dodd-Frank Act did not give the CFPB statutory authority to conduct military lending exams. That decision received major pushback from military and veterans groups, as well as Democrats in the House and Senate.
The House Democrats’ letter said a 47% increase in complaints filed by members of the military, veterans and their families necessitated the CFPB’s monitoring of Military Lending Act compliance.
The Military Lending Act caps the annual interest rate for an extension of consumer credit to a service member or his or her dependents at 36%.
“We believe it would be wrong and contrary to the Consumer Bureau's statutory mission to reduce oversight of its regulated entities, particularly for this vulnerable population,” the letter said.
The lawmakers called on Kraninger "to ensure that the MLA and all other consumer protections are fully enforced" and asked for her written commitment by Dec. 21.
"We hope you agree with our view that servicemembers and their families deserve nothing less from the federal government in honor of their service to our country," they wrote.
