Military Issues

Subscribe to Military Issues

The Consumer Financial Protection Bureau’s (“CFPB”) Office of Servicemember Affairs Annual Report was released on September 24, 2024, highlighting areas of concern regarding student lending and noting that the number of complaints that servicemembers filed with the CFPB increased in 2023.

The report identifies trends in complaints, highlights financial services issues impacting servicemembers and veterans, and offers recommendations to improve financial protections for the military community.… Continue Reading

Career Step LLC, an online career training company has been ordered to pay $43.5 million in cash and debt cancellation to resolve FTC charges that the company “lured consumers, specifically servicemembers and their families, with deceptive ads that falsely touted inflated employment outcomes, job placement, and partnerships with prominent companies.”

The company will cancel $27.8 million in debt and pay $15.7 million to provide redress to consumers harmed by its deceptive advertising.… Continue Reading

FirstCash, a national pawnshop chain, is asking a federal judge to confirm that it has a statutory defense to all of the CFPB’s claims that it violated the Military Lending Act (MLA) while also asking the judge to drop three of the CFPB’s MLA claims for lack of jurisdiction—contending that the bureau has conceded that it does not have the authority to enforce those claims..… Continue Reading

In a November 1, 2023 blog post titled “Servicemembers continue to face major financial challenges,” the Consumer Financial Protection Bureau highlighted three areas where it is working to secure protections for servicemembers, including the Servicemembers Civil Relief Act’s (“SCRA”) 6% interest rate cap, restrictions on the use of military allotments, and efforts to protect servicemembers from identity theft. … Continue Reading

In dismissing a class action last month alleging violations of the Military Lending Act (“MLA”), a federal district court in Virginia held that the MLA’s two-year statute of limitations is triggered by discovery of the facts underlying the violation, not by discovery that the MLA had been violated.  Finding the MLA’s text to be inconclusive on this issue, the court looked to case law interpreting a similar statute of limitations in the Fair Credit Reporting Act (“FCRA”) for guidance.… Continue Reading

On June 13, 2023, the Department of Justice (“DOJ”) announced that it had settled an action against a multi-family residential property management company for alleged violations of the Servicemembers Civil Relief Act (“SCRA”) prohibition on imposing early termination charges when a servicemember lawfully terminates a residential lease after receiving military orders. … Continue Reading

In a highly anticipated decision regarding the treatment of Guaranteed Asset Protection (“GAP”) under the Military Lending Act (“MLA”), a federal appellate court has ruled that a hybrid loan that finances GAP coverage along with a motor vehicle purchase is exempt from the MLA’s restrictions.  The 2-1 decision on April 12, 2023 by the U.S.… Continue Reading

On March 3, 2023, the U.S. Department of Justice (DOJ) filed a complaint against a towing company located near a Marine base alleging violations of the Servicemembers Civil Relief Act’s (SCRA) prohibition against default judgments against SCRA-protected servicemembers.  The case, filed in U.S. District Court for the Eastern District of North Carolina, alleges that the towing company failed to make a good faith effort to ascertain the military status of defendants before filing affidavits in court cases claiming military status could not be determined.… Continue Reading

On February 27, 2023, the Consumer Financial Protection Bureau (CFPB) entered into a consent order against RMK Financial Corporation d/b/a Majestic Home Loan (RMK), a California-based mortgage lender, based on allegations that it falsely implied government endorsement of its home loans in its marketing. The consent order, which addressed numerous alleged statutory and regulatory violations and a failure to comply with an earlier consent order, prohibits RMK from engaging in any mortgage lending activities (or from receiving remuneration from mortgage lending) going forward, effectively shutting it down.… Continue Reading

A new report from the Urban Institute examining the 2015 expansion of the Military Lending Act (“MLA”) concludes that it did not lead to better credit and debt outcomes for servicemembers and may instead have limited access to credit for some servicemembers with deep prime credit scores.  The report, titled “The Effects of APR Caps and Consumer Protections on Revolving Loans: Evidence from the 2015 Military Lending Act Expansion,” used credit bureau data to assess the impact of the MLA’s expansion on credit card ownership rates, credit limits, delinquency rates, and credit scores of MLA covered borrowers with subprime credit scores. … Continue Reading