House Republicans are seeking to delay forthcoming Pentagon regulations that would tighten restrictions on high-cost loans to members of the military.
The GOP measure, which is facing opposition from congressional Democrats and consumer groups, is contained in the House's annual defense authorization bill. That is widely viewed as must-pass legislation.
The bill would require the Defense Department to provide Congress a report about its rulemaking by March 1, 2016. That report would include an analysis of the hundreds of comments the Pentagon received in response to its proposed rules. The department had been expected to finalize the regulations in 2015, but the measure could delay the regulations by at least a year, according to its critics.
A House Armed Services Committee vote on an amendment authored by Rep. Tammy Duckworth, D-Ill., which would strip the contentious language from the legislation, was expected late Wednesday.
The Pentagon's proposed rule, which was issued in September, aims to make it harder for high-cost lenders to find ways around an existing annual percentage rate cap of 36% for active-duty members of the military. It came after the Defense Department concluded in a report that debt problems among service members were affecting military readiness.
Under the current rules, installment loans, credit cards and other open-end credit products are not subject to the rate cap, but that would change under the Pentagon's proposal. The existing rules have not prevented lenders from offering expensive credit to soldiers; indeed, high-cost lenders remain fixtures outside the gates of many military bases.
The proposal would also require lenders to check a database in order to determine whether a loan applicant is a member of the military, or a spouse or dependent of one.
It has drawn vigorous opposition from various financial industry groups. They have argued that the rules would make it extremely difficult for lenders to offer small-dollar loans to members of the military. And they have complained about the burden associated with having one set of rules for service members and another set of rules for everyone else.
On Wednesday, representatives of industry groups said that more data is needed before the proposal goes forward. They argued that the database could be overloaded if lenders are required to use it to check whether any applicant for consumer credit is a member of the military.
"There's a huge database problem with the rule as proposed," said Bill Himpler, executive vice president at the American Financial Services Association, which supports the House legislation.
Quincy Enochs, associate director of legislative affairs and military liaison at the National Association of Federal Credit Unions, said that his trade group also supports the bill, so that additional study can be done on the database.
It was unclear Wednesday who wrote the controversial provision. A spokesman for House Armed Services declined to comment on the measure.
Consumer groups and their Democratic allies in Congress sought Wednesday to publicize the provision with the hope that media coverage would lead Republicans on the committee to remove it from the bill.
Duckworth said in a news release that the Republican proposal would "force the Department of Defense to waste resources undertaking redundant studies and postpone the implementation of valuable protections."
She argued that the burden of unmanageable debt can affect security clearances and advancement through the ranks of the military.
"Unscrupulous debt collectors go after service members deployed overseas and who are unable to answer claims," Duckworth said. "Credit is destroyed and lives are disrupted."