Warner, Kaine Back Plan To Better Protect Military Families From Abusive Financial Practices
WASHINGTON, D.C. – Today, U.S. Senators Mark Warner and Tim Kaine, along with 40 of their Senate colleagues, sent a letter in support of the Department of Defense’s (DOD) plan to update the Military Lending Act (MLA) and close existing loopholes to better protect servicemembers and their families from abusive financial practices. The letter, sent to U.S. Secretary of Defense Chuck Hagel, expresses strong support for the proposed new rule to help prevent lenders from charging excessive fees and taking advantage of military families.
“As our servicemembers are asked to take on even more tasks in defense of our nation, we should take every opportunity to protect them and their families here at home, especially from unscrupulous lenders,” the senators wrote. “We strongly support the proposed MLA rule and urge that the final MLA rule be similarly robust in enhancing protections for servicemembers and their families, producing significant cost savings for DOD, and improving military readiness.”
This is the third action Warner and Kaine have taken in recent months to protect servicemembers and their families from abusive financial practices. In August, they called for a federal investigation into aggressive debt collection actions used by retailers against servicemembers. In response to a separate letter from Warner and Kaine, DOD recently announced a policy change to protect servicemembers from businesses that use allotments to trap Soldiers, Sailors, Airmen, Marines and their families in illegal predatory loans.
Congress first passed the MLA following a 2006 Pentagon report that found that “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all-volunteer fighting force.” This law capped the annual interest rates for consumer credit to servicemembers and their dependents while giving DOD the authority to define what loans should be covered. The DOD’s 2007 implementing regulations narrowly included only three types of loans: certain payday, auto title, and refund anticipation loans.