WASHINGTON — As President Donald Trump dismantles the Consumer Financial Protection Bureau, advocates of the agency warn that veterans and military service members in the Commonwealth will suffer.
The bureau partly enforces the Military Lending Act, which protects service members and their families from predatory lending and financial practices. The bureau has issued regulations that include limits on overdraft fees and restrictions on considering medical debt in credit reports.
Brian Johns, executive director of Virginia Organizing, said military members are often targets of predatory financial practices – many times right outside their bases.
“There were just dozens of payday-lending places, check-cashing places, car-title lending places,” he said. “It became apparent that many of those who were living on base were definitely the targets to get cash quick, but without being made fully aware of all of the negative implications, including, like, 400% interest.”
In a speech in February, Trump called the bureau “out of control” and questioned whether employees at the agency received kickbacks from money they return to consumers.
The House originally planned to vote to end overdraft fee protections enacted by the bureau this week. But disagreements among Republicans on other legislation ground votes in the lower chamber to a halt.
Christine Chen Zinner, chief policy counsel at Americans for Financial Reform, said service members have been described as the canary in the coal mine for abusive practices by financial institutions. The bureau, she said, helps protect service members, especially younger enlistees with less financial literacy.
“It is truly an agency where the government’s working for the people,” she said. “They vigorously protect consumers and their families. They protect service members, veterans and their families. They reduce junk fees, and they hold companies accountable when they engage in unfair and illegal conduct.”
Since its inception, the bureau has returned more than $360 million to veterans and service members.
