On December 29, 2014, the Consumer Financial Protection Bureau (CFPB) released a report, entitled “The Extension of High-Cost Credit to Servicemembers and Their Families” (“Report”). According to the CFPB, the Report provides a “snapshot” of the market for “high-cost credit products” that are not currently covered by the Military Lending Act (MLA). The CFPB released the Report together with its comment letter to the Department of Defense (DoD) on the DoD’s recent proposal to amend the regulation that implements the MLA. The following is a high-level overview of the CFPB Report and comment letter.

CFPB REPORT PURPORTS TO PROVIDE SUPPORT FOR EXPANDING THE MLA -

The CFPB said in a press release announcing the Report that it identifies how “gaps [in the MLA] have allowed companies to offer high-cost loans to military families.” However, the Report is based primarily on data derived from the CFPB’s 2013 white paper on deposit advance products and does not provide a statistical analysis or compelling reasons supporting a broad expansion of MLA coverage. For example, the CFPB says in the Report that its analysis of 2013 deposit advance product data indicates that “some depository institutions extended millions of dollars in deposit advances to servicemembers with APRs that typically exceeded 300 percent.” Notwithstanding the CFPB’s assertion on this point, there is little data presented in the Report that provides a basis for how the CFPB reaches its findings.