Amid fanfare about its commitment to the protection of the military, the CFPB has released new guidelines to assist its examiners regarding payday and title loans to military servicemembers and their dependents. “Protecting servicemembers is a priority for the CFPB,” said CFPB Director Richard Cordray. “We will use the authority Congress gave us to enforce the Military Lending Act and to safeguard our men and women in uniform from illegal payday loans.”

The Military Lending Act of 2007 (the “MLA”), sometimes referred to as the “Talent Amendment,” limits annual percentage rates on covered loans to 36% and has effectively made it impossible for payday and title lenders to make closed-end loans of $2,000 or less and with terms of 91 days or less to covered borrowers. As payday lenders no longer make these loans, we are a bit perplexed about the need and purpose of the guidance.