At a time when some in Congress are trying to reduce the power of the Consumer Financial Protection Bureau (CFPB), a coalition of consumer groups is trying to expand the agency's authority.
Specifically, the groups – including the Consumer Federation of American, Public Citizen, Americans for Financial Reform, and the National Consumer Law Center – are backing legislation to give the agency the power to protect military consumers from exploitation.
Senate Democrats have introduced legislation that would give CFPB direct oversight of the Military Consumer Enforcement Act, a 2003 law designed to protect military personnel from abusive financial practices and predatory loans.
Aimed at promoting military readiness
The original law was aimed at promoting military readiness by trying to relieve military personnel of the worries about default judgments, foreclosures and repossessions.
“Predatory schemes frequently target service members and their families,” said Lisa Donner, Executive Director of Americans for Financial Reform. “This legislation grants the CFPB the authority it needs to effectively enforce crucial SCRA protections that make sure banks can’t put military families out on the street or seize their cars in violation of the law.”
Lisa Gilbert, a vice president at Public Citizen, said the legislation is more important than ever. She said in recent years banks and other lenders have forced consumers into secret arbitration and block consumers – even members of the armed forces – from their day in court.
“The CFPB has a strong record of safeguarding military families from financial fraudsters,” said Michael Best, senior policy advocate with the Consumer Federation of America. “By equipping the agency with new tools, it can continue to protect consumers and companies that play by the rules.”
CFPB actually has an office dedicated to serving members of the military community. Military leaders recently went to bat for the agency, praising its work on behalf of service men and women.
In February, senior enlisted leaders appeared at a hearing of the Senate Armed Services Personnel Subcommittee to sing the praises of the CFPB, telling lawmakers it has served to protect and educate military families. They urged the committee not to cut off CFPB funding, as some members have proposed.
Republicans have generally opposed CFPB, claiming it is not accountable to Congress and has imposed harmful regulations on businesses. The agency was established under Dodd Frank financial reform legislation and is dedicated solely to protecting consumers from abusive financial practices.