The Consumer Financial Protection Bureau’s (CFPB) intention to withdraw all existing guidance will create uncertainty in consumer financial markets to the detriment of consumers, businesses, and financial institutions. The military community relies on the CFPB to protect its servicemembers from predatory lenders. By walking away from its duties, the CFPB is putting servicemembers at risk and undermining the effectiveness of the Armed Forces.

The CFPB has authority to supervise and enforce the Military Lending Act (MLA), which protects active-duty servicemembers, their spouses and dependents from predatory creditors. It caps interest rates at 36 percent using a “Military Annual Percentage Rate” that includes interest, fees, credit insurance premiums, and the cost of any credit-related product sold in connection with the loan. The MLA covers payday loans, deposit advances, vehicle title loans, overdraft lines of credit, some installment loans, some student loans, and credit cards. In addition, creditors cannot use mandatory arbitration agreements or condition credit based on giving up state or federal protections, including those in the Servicemember Civil Relief Act. 

The CFPB conducted its first examinations of financial institutions for compliance with the MLA in 2013. In 2018, under the first Trump administration, the CFPB suspended its MLA supervisory work. At the time, the military community had been pushing the CFPB to strengthen its efforts to protect servicemembers. When the CFPB chose to cease its supervisory work, military and veterans organizations stated their strong objections. 

Supervision resumed in 2021, when the CFPB issued an interpretive rule (IR) instructing companies on how to comply with the Military Lending Act (MLA). The IR includes instructions for non-bank lenders (including payday lenders) and depositories with more than $10 billion in assets. Examinations for Risks to Active-Duty Servicemembers and Their Covered Dependents is one of the seven IRs slated for withdrawal under the CFPB’s new leadership. 

The CFPB’s rationale is that it does not need guidance if it has no intent to enforce financial laws. The announcement in the Federal Register makes the linkage: “The Bureau is reducing its enforcement activities in light of President Trump’s directives to deregulate and streamline bureaucracy, and therefore has no pressing need for interpretive guidance to remain in effect.”

The military community has expressed its strong and consistent support for the CFPB’s work to defend servicemembers.  

Organizations representing the military have advocated for the CFPB:

• In 2023, the following military groups submitted an amicus brief to the Supreme Court in Consumer Financial Protection Bureau v. Consumer Financial Services Association: The Military Officers Association of America (MOAA); Blue Star Families; National Military Family Association; Blinded Veterans Association; Coast Guard Chief Petty Officers Association; Iraq and Afghanistan Veterans of America; Jewish War Veterans of the U.S.A.; Military Chaplains Association; Military Order of the Purple Heart; Naval Enlisted Reserve Association; Service Women’s Action Network, The Society of Federal Healthcare Professionals; United States Army Warrant Officers Association; Veterans Education Success; and Vietnam Veterans of America. 
• In 2023, MOAA testified about the urgent need for a strong CFPB before the Senate Banking Committee, commenting that “The bureau is good for our servicemembers, good for our veterans, and helps maintain the all-volunteer force. In turn, it helps defend our country.” 
• In 2024, after the Supreme Court voted 7-2 in favor of the CFPB in Community Financial Services Association of America v. CFPB, MOAA issued a publication outlining the ways the CFPB helps servicemembers. It concluded by noting that “This is a welcome victory that ensures servicemembers, veterans, and their families will have an agency safeguarding their financial interests for years to come.”
• In February 2025, military organizations wrote to Acting CFPB Director Russell Vought, urging him to reverse plans to gut the Office of Servicemember Affairs and discontinue MLA supervisory examinations. 

Guidances help consumers and financial companies

Guidances help businesses to understand how the CFPB will apply a law or regulation. Guidances refer to several actions, including supervisory highlights, FAQs, advisory opinions, and interpretive rules. For example, supervisory highlights provide examples of how financial institutions are successfully complying with regulations. FAQs provide straightforward answers to questions posed by companies to the CFPB. As the name implies, interpretive rules indicate how an agency interprets a rule, providing companies with clarity on how to avoid investigations. 

This CFPB appears to be dedicated to providing a free pass to business, but an absence of guidance leaves financial companies with uncertainty on how to follow laws that are still in effect. In 2023, when a case reached the Supreme Court challenging the CFPB’s independence, mortgage banking, real estate brokerage and homebuilding trade associations filed an amicus to express their concern that their businesses would suffer without the CFPB’s guidance on compliance with the qualified mortgage rule. The amicus noted:

“Virtually all financial transactions for residential real estate in the United States depend upon compliance with the CFPB’s rules, and consumers rely on the rights and protections provided by those rules. Importantly, the industry has invested billions of dollars into structuring its operations for compliance with the CFPB’s regulations and other guidance. . . . . Lenders, servicers, and consumers have operated by the CFPB’s guideposts for more than ten years, and without those rules substantial uncertainty would arise as to how to undertake mortgage transactions in accordance with federal law.”

Markets depend on guidances to function smoothly. While guidances may be withdrawn, consumer financial protection laws still exists. 

Predatory companies target servicemembers. 

Before the MLA, the Department of Defense found that servicemembers were four times more likely than civilians to borrow from a payday lender. When the number of payday lenders surged in the early 2000s, it directly impacted the military. Approximately one in five servicemembers used payday lenders. The CFPB has shown that some lenders use deceptive tricks to compel servicemembers to let them collect loans from allotments. 

When servicemembers encounter financial problems, it can affect force preparedness. Financial issues contribute to approximately 40 percent of cases where a security clearance is revoked.  From 2000 to 2005, revoked or denied security clearances resulting from a financial problem increased 1,600 percent in the Navy and Marine Corps, representing 80 percent of all revocations or denials. 

Indebtedness is only one reason for a servicemember to have difficulties that could compromise their work. For example, an inaccurate credit report could cause a servicemember to lose their security clearance. In 2021 alone, servicemembers filed 17,000 complaints about false information on credit reports.. The CFPB uses its supervisory authority to ensure credit bureaus respond when incorrect information exists on a credit report. The CFPB has issued guidance requiring credit bureaus to correct false information for background checks (2024 advisory opinion)

The CFPB works with the Department of Justice to ensure active-duty military personnel receive their Servicemember Civil Relief Act (SCRA) rights.

The SCRA requires lenders to lower interest rates on loans when servicemembers are on active duty. 

Although servicemembers are entitled to these benefits, CFPB research found that fewer than 1 in 10 auto finance loans and 1 in 16 personal loans eligible for a rate reduction received a new rate below the legally-required 6 percent. If those servicemembers had received the rate reductions they deserved, they would have saved over $100 million. Complaints filed to the CFPB’s Consumer Complaint Database led to investigations that helped servicemembers get relief.

While the Department of Justice has the primary authority for SCRA, the CFPB is charged with monitoring the performance of lenders to honor the SCRA. To fulfill those responsibilities, the CFPB has conducted research highlighting the problems experienced by many servicemembers when they seek credit. 

• For example, many servicemembers pay more to finance the purchase of a car. On average, interest rates on loans originated to servicemembers are 0.6 percentage points higher than for civilians. In practice, this translates to increased costs of $1,300 over the life of an average-priced vehicle loan.
• Servicemembers are much more likely to see the cost of financing a car increase further when they purchase add-on products. Add-on products often provide very little value. Because they inflate dealer profits, many servicemembers endure high-pressure sales tactics for services like VIN etching, fabric protection, GAP insurance, and extended warranties. 
• More than 70 percent of servicemembers pay for an add-on product, increasing the overall cost of the car by $644 on average.

Notably, when the CFPB ceased to supervise compliance with the MLA in 2020, servicemembers’ purchases of add-on products increased significantly.

Other Steps Taken by this Administration to Abandon Servicemembers and their Families

The new CFPB has repeatedly said that it will prioritize the needs of servicemembers (it uses the term ‘servicemen’), but the evidence strongly suggests otherwise. They have favored lawbreakers – current, past, and future – without regard to the household financial security of everyone else. 

Taking them by their word suggests that they will not resurrect the MLA guidance. The notice in the Federal Register states “…the Bureau is committed to issuing guidance only where that guidance is necessary and would reduce compliance burdens rather than increase them.” But “compliance burdens” and the threat of an enforcement action are precisely the steps that prevent a payday lender from originating a two-week 521 percent loan and then rolling it over several times, and also the steps stopping an installment lender from loaning $10,000 at 50 percent interest to an Air Force E-4. 

In addition to dropping the MLA IR, the CFPB has undermined servicemembers by gutting the Office of Servicemember Affairs: The CFPB said it would reduce the staff of OSA to one person. The employee in that role had already agreed to the “fork in the road” and was on long-term administrative leave pending plans to retire in September 2025. On April 17th, staff at OSA received reduction in force (RIF) notices. Veterans were the first to receive RIFs. Effectively, the CFPB’s plan left the OSA unstaffed. At the time, the OSA’s staff included veterans, some of whom were disabled. RIFs will have a devastating impact on the OSA. Staff in the office have years of experience, unique subject-matter expertise, and interagency relationships with other financial regulators and the Department of Defense.  

While they are not the only ones using the database, servicemembers rely on the CFPB’s complaint database to seek help when they have a problem with their financial service. Since 2011, servicemembers have filed more than 400,000 complaints to the CFPB. Servicemembers from all fifty states and every military base have used the CFPB’s complaint database. The number of complaints filed by servicemembers increased 98 percent between 2021 and 2023. By statute, the CFPB’s OSA is required to coordinate with the office in charge of the complaint database and direct filers to appropriate federal and state agencies. As well, the CFPB has relied on complaints to initiate investigations on MLA violations. 

Separately, legislation in Congress could require the CFPB to send funds accrued in its Civil Penalty Fund (CPF) to the Treasury Department. If that had been in effect in 2024, servicemembers who lost funds when Voyager Digital went bankrupt would have not received relief they were due.  However, the CPF did exist – and the CFPB drew on the CPF for $5.1 million of the $6 million awarded. 

If the extremist leadership at the CFPB is successful in its illegal actions to delete the agency, servicemembers, veterans and military families stand to be among the groups most impacted. The CFPB has stood by the military community ever since it was created. Rescinding guidance and suspending enforcement of the MLA will only help predatory lenders stay out of trouble  at a great cost to the military community.