The Consumer Financial Protection Bureau’s ability to proactively ferret out financial abuses of our nation’s military looks set to be severely curtailed — and consumer expert Clark Howard is outraged about it.
CFPB rule change could harm our military members
Being in our nation’s all-volunteer military comes with certain privileges and protections for your pocketbook or wallet.
For example, the Servicemembers Civil Relief Act (SCRA) offers the following protections to active-duty personnel:
- An annual interest rate cap of 36% on all borrowing
- No repossessions or foreclosures can happen without a court order while on foreign duty deployment
- No eviction by landlord unless the rent is higher than $3,451.20 per month
Of course, the sad reality is that unsavory lenders flout these mandates everyday. As just one example, some payday lenders continue to put military personnel looking for emergency money into payday loans with interest rates that are in the hundreds of percent.
The CFPB is supposed to be cop on the beat trying to protect our brave men and women in the armed forces from these abuses.
But a new draft of potential changes to how the CFPB investigates claims of military lending abuses has consumer expert Clark Howard fighting mad.
According to The New York Times, the specific changes CFPB interim direct Mick Mulvaney is seeking have to do with what’s called “supervisory examinations.”
Supervisory examinations are like a hunting or fishing license for the CFPB. They allow the agency to proactively track down leads to uncover systemic patterns of abuse among lenders, a practice which has led to some the biggest fines the CFPB has levied against payday lenders.
Mulvaney argues the agency doesn’t have the legal right to take such sweeping investigative actions.
And if he has his druthers, insiders say the CFPB would become more reactive. It would likely have to wait passively until complaints come into the agency from individuals who believe they’ve been wronged — rather than being out there proactively as a cop on the beat.
Money expert Clark Howard is fighting mad about the potential changes, calling them “an outrage.”
“I am incensed beyond measure that so casually, carelessly, thoughtlessly and heartlessly the federal agency whose responsibility it is to protect military personnel — who are willing to pay the ultimate price for your and my freedom, by the way — that these people are being dissed and the laws to protect them are no longer going to be enforced,” the consumer champ says.
Clark says the key going forward is that if you have a young family member or friend who serves in the military, make sure they know about their rights under the Servicemembers Civil Relief Act.
“Please make sure they’re aware of this, and shame, shame, shame on the director of CFPB who is spitting on these brave men and women, these patriots, that serve us in the U.S. military.”