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
New study finds Military Lending Act expansion had limited impact for military credit card customers
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
House Oversight and Reform Subcommittee on National Security holds hearing on protecting military servicemembers and veterans from financial scams and fraud
On July 13, 2022, the House Committee on Oversight and Reform, Subcommittee on National Security held a hearing entitled “Protecting Military Servicemembers and Veterans from Financial Scams and Fraud.” A recording of the hearing is available here.
July has been designated as “Military Consumer Month,” a public-private marketing initiative created by state and federal agencies and military and consumer groups designed to draw attention to financial issues impacting the military community. … Continue Reading
FTC Launches Military Consumer Data Dashboard
The Federal Trade Commission (FTC) has launched a new online “dashboard” that makes certain data received from active duty servicemembers and veterans publicly available. The data come from the FTC’s Consumer Sentinel Network, which aggregates consumer complaints received directly from consumers, as well as data contributions received from others (including state attorneys general, the CFPB, and other government agencies, watchdog groups, and private companies).… Continue Reading
Washington DFI Extends SCRA Interest Rate Cap to Servicemember Spouses
In its recently published Summer 2019 Newsletter, the Washington State Department of Financial Institutions (“DFI”) reported that it had interpreted the Servicemembers Civil Relief Act (“SCRA”) broadly to apply the SCRA’s 6% interest rate cap to a loan agreement entered into only by a servicemember’s spouse. Generally, the SCRA provides for a 6% interest rate cap during the period of military service for non-mortgage obligations and liabilities “incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service[.]” … Continue Reading
Senate Passes Bill That Would Amend SCRA to Expand Spousal Lease Termination Rights
On June 27 the Senate passed the Gold Star Spouses and Spouses of Injured Servicemembers Leasing Relief Expansion Act as part of the Fiscal Year 2020 National Defense Authorization Act (see Sec. 6007). If it becomes law, the bill would amend the SCRA to allow spouses of servicemembers killed or injured during service to terminate certain types of leases.… Continue Reading
Department of Defense Proposes Data Sharing Arrangement with Department of Education to Identify Service Members Eligible for 0% Interest on Federal Student Loans
A Federal Register entry published last week details a proposed data-sharing arrangement between the Department of Defense (DoD) and the Department of Education (DoE) designed to reduce the amount of interest that certain active duty service members pay on federal student loans.
In 2008, Congress amended the Higher Education Act to provide for the removal of interest on federal student loans for military borrowers during service in war zones.… Continue Reading
CFPB issues report on servicemember first-time homebuyer mortgage loans
The CFPB has issued a report, “Mortgages to First-time Homebuying Servicemembers,” that focuses on mortgage loans made from 2006 to 2016 to first-time homebuyers who are serving in the military or are veterans. In its press release, the Bureau states that the report represents “the first time researchers have been able to provide a description and analysis of servicemembers’ mortgage choices and mortgage performance, both during and after the housing crisis of the last decade.”… Continue Reading
California Further Expands Protections to Servicemembers, Restricts Credit Reporting About Active Duty Status, Requires Written Responses to Requests for Relief under the Statute; and Enacts New Criminal Penalties
On September 19, 2018, California enacted AB-3212. The Bill amends the California Military and Veterans Code to expand the protections offered to qualifying servicemembers under state law and to impose new criminal penalties for certain violations of its provisions. Some of the key changes, which go into effect January 1, 2019, are as follows:
- Extends most protections to 120 days after military service ends (prior provision extended protections for 60 days after the end of military service).
Cordray’s Letter to President Trump Distorts Impact of Arbitration Rule
CFPB Director Richard Cordray yesterday sent a letter to President Trump asking him to uphold the Bureau’s arbitration rule even though the Senate recently joined the House in authorizing a repeal of the rule under the Congressional Review Act.
Director Cordray’s letter states that without the arbitration rule, military service members will “get cheated out of their hard-earned money and be left helpless to fight back.” … Continue Reading