On November 12, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it filed a complaint in the United States District Court for the Northern District of Texas against two pawnshop lenders, alleging violations of the Military Lending Act (MLA), 10 U.S.C. § 987.  Under the MLA, consumer credit extended to military servicemembers may not have an annual percentage rate (APR) in excess of 36% and lenders may not require covered borrowers to submit any potential disputes with the lender to arbitration.  ​

The CFPB alleges that between October 2016 and May 2021, the lenders made over 3,600 pawn loans to more than 1,000 military servicemembers in Arizona, Nevada, Utah, and Washington.  These loans allegedly imposed APRs over 36%, with APRs frequently exceeding 200%.  The CFPB further alleges that the loans contained arbitration clauses in contravention of the MLA.  The lenders are further ​alleged to have failed to provide certain loan disclosures to these borrowers as required by the MLA.  Finally, the CFPB alleges that lenders violated the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5536, by way of their purported MLA violations.

The CFPB seeks injunctive relief, monetary relief, disgorgement, civil money penalties, and costs.