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Tuesday, January 20, 2015

ABA Pushes Back on CFPB Military Lending Study

ABA pushed back against the CFPB’s study of “high-cost credit” extended to service members and their families. In a letter to the Defense Department, which has proposed to expand limitations on credit under the Military Lending Act, ABA cautioned the Pentagon not to rely on the CFPB’s study.

The Bureau’s study — released days after the comment period on the DoD proposal had closed — does not even meet the CFPB’s evidence-based standards for its own rulemaking, ABA said. For example, the bureau asserts that service members are more likely to use deposit advances but does not test this assertion against other variables at the CFPB’s disposal. ABA concluded:

Ultimately, it is service members of all ranks and their spouses and dependents who will suffer if a rule is promulgated on such a faulty basis as the points raised in the Bureau’s recent materials. These families will lose access to valuable mainstream products that will help them manage their finances as effectively as do members of the general population.

Read ABA’s letter.
Read the CFPB report.

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