Republicans Block Pocan Amendment to Regulatory Accountability Act of 2015
WASHINGTON, D.C.—U.S. Rep. Mark Pocan (WI-02) today criticized House Republicans for blocking consideration of his amendment to H.R.185 – Regulatory Accountability Act of 2015 which would protect America’s servicemembers and their families from predatory lending practices. Pocan’s amendment would empower the U.S. Department of Defense (DoD) and the Consumer Financial Protection Bureau (CFPB) to use regulations within the Military Lending Act (MLA) to prevent disreputable lenders from charging service men and women excessive interest rates.
“Predatory lending harms the morale of troops and their families and undermines military readiness,” said Rep. Mark Pocan. “It’s shameful Republicans prevented the House from having a full and open debate on this important issue. Instead they chose to protect predatory lenders and their tactics over protecting our men and women in uniform and their financial livelihoods.”
Congress passed the Military Lending Act in 2006 - to protect servicemembers from abusive predatory lending practices. However, the law left open many "loopholes" allowing lenders to continue to peddle some high-interest credit products. The Military Lending Act caps interest rates for military families at 36 percent. However, the limit only applies to three specific financial products: payday loans up to $2,500, auto title loans and tax refund anticipation loans. Some unscrupulous lenders responded by changing their products to fall outside the regulations, allowing many of the predatory lending practices to continue.
“We protect our service men and women with the equipment they need when they go into battle, so it’s important to make sure we protect them from predatory lending here at home,” continued Rep. Pocan. “This amendment was a step in the right direction, but thanks to House Republicans, predatory lenders will be able to continue to exploit loopholes in the law and take advantage of our servicemembers and their families. It’s necessary to ensure regulators can continue to keep pace with industry practices in order to protect military personnel from this type of predatory lending.”
The amendment would allow the DoD and the Obama administration to move forward on proposed regulations to expand servicemember protections in the Military Lending Act.
In a new report, the Consumer Finance Protection Bureau said, “The products that have been marketed and extended to servicemembers while the current Military Lending Act regulations have been in place underscore the limitations of those regulations in protecting servicemembers and their families across the credit marketplace.”