In Honor of Veterans Day, Van Hollen Introduces Legislation to Extend Critical Financial Protections for Servicemembers to Veterans and Consumers
Today, U.S. Senators Chris Van Hollen (D-MD), Jeff Merkley (D-OR), Sherrod Brown (D-OH), and Jack Reed (D-RI) introduced legislation to extend the protections of the Military Lending Act (MLA), which caps the interest rate on consumer loans at 36 percent, to cover veterans and other consumers.
In 2006, Congress passed the MLA to rein in predatory payday lenders and other loan product providers who used abusive lending practices to target and lure American troops into vortexes of debt. However, the legislation left veterans, Gold Star families, and other Americans vulnerable to those lending practices and products.
“Predatory lending practices that aim to take advantage of our nation’s consumers – including their targeting of the men and women who have fought and sacrificed so much for our country – are shameful. This legislation will help prevent those practices, building on the success of the Military Lending Act. I urge the Senate to move forward on this common-sense bill to protect veterans and all consumers immediately,” said Van Hollen.
“Predatory payday practices that entrap servicemembers, veterans, Gold Star families, or any hardworking American family in high-interest loans should be illegal,” said Merkley. “The Military Lending Act made an enormous difference for active duty members of the military, and it’s time to extend the same protections to veterans and other consumers. It’s time to put the interests of working Americans above the profits of abusive payday lenders.”
“Our veterans and their families deserve better. We cannot allow high-cost, predatory loans to trap veterans and surviving families in cycles of debt,” said Brown. “This bill protects veterans and consumers by reestablishing a simple, common-sense limit on loan interest rates and prevents predatory hidden fees and loopholes.”
“The Military Lending Act has been a rare bipartisan success, and predatory lenders should not be given more targets just because servicemembers and their families retire, separate from honorable service, or lose their loved ones,” said Reed. “The Veterans and Consumers Fair Credit Act not only restores these Military Lending Act protections for Veterans and Gold Star families, but also ensures that all Americans are no longer in danger of debt traps. I am pleased to join my colleagues, Senators Merkley and Brown, in introducing the Veterans and Consumers Fair Credit Act, and I am proud to stand with all the consumer, veterans, military and civil rights organizations who support our legislation.”
Under the Veterans and Consumers Fair Credit Act, the Military Lending Act’s 36 percent interest rate cap on most consumer loans and its current rules would be extended to all consumers, including veterans and Gold Star families. The Veterans and Consumers Fair Credit Act also confirms the CFPB’s authority to conduct supervisory examinations to ensure that lenders are complying with the MLA’s 36 percent APR cap for servicemembers, veterans, and all Americans.
The legislation has been endorsed by a wide variety of consumer, civil rights, veterans, servicemember organizations, and advocates, including: National Military Families Association; Iraq and Afghanistan Veterans of America; Veterans Education Success; Allied Progress, Americans for Financial Reform; Center for Responsible Lending; Consumer Action; Consumer Federation of America; The Leadership Conference on Civil and Human Rights; NAACP; National Consumer Law Center (on behalf of its low-income clients); Prosperity Now; UnidosUS; and Hollister Petraeus and Colonel Paul E. Kantwill, USA (Ret), the former Assistant Directors, Consumer Financial Protection Bureau, Office of Servicemember Affairs.
The full text of the bill is available here.
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