On December 29, the Consumer Financial Protection Bureau issued
a
report calling for stricter and more extensive regulations
to the Military
Lending Act. The report, titled The Extension of
High-Cost Credit to Servicemembers and Their Families, comes
on the heels of a recent action by the CFPB, in which Virginia and
North Carolina alleged that Freedom Stores, Inc., had engaged in
illegal debt collection practices against servicemembers.
In 2006, Congress enacted the Act to protect military personnel
and their dependents from predatory lending practices. The
Act does so by (1) capping at 36 percent the rate that a creditor
may charge in extending consumer credit to covered servicemembers
and their dependents, including fees; and (2) creating a series of
special consumer protections for covered members and dependents.
The Department of Defense implements the Act. However,
pursuant to a 2013 congressional amendment, the CFPB, among other
agencies, has authority to
