In a blog post published on January 28, 2021 sharing a statement sent to CFPB staff, Acting Director David Uejio announced several new priorities for the CFPB’s Supervision, Enforcement and Fair Lending Division under the Biden Administration. In addition to prioritizing COVID-19 relief and racial equity, the CFPB will take new aim at Military Lending Act (MLA) compliance.
Acting Director Uejio criticized the prior administration’s approach to the MLA, which he indicated resulted in weakened enforcement and supervision. In 2018, the CFPB stopped supervising creditors for MLA compliance on the ground that “proactive oversight is not explicitly laid out in the legislation,” a position that was supported by an analysis of the CFPA. In an immediate departure from that position, Mr. Oejio announced that the CFPB’s official policy will be to resume supervisory examinations of lenders for MLA compliance. And while there has never been any question regarding the CFPB enforcement authority over the MLA, Mr. Oejui also announced plans to retract any CFPB public statements indicating a “relaxed approach” to enforcement.
Even during 2020 under former Director Kraninger’s leadership, the CFPB appeared to ramp up enforcement focused on military servicemember protection. The CFPB engaged in a major investigatory sweep resulting in 25 new enforcement actions related to violations of Regulation N by mortgage companies offering mortgages guaranteed by the Department of Veterans Affairs (see our blog posts here, here, here, and here). The CFPB also announced two enforcement actions for violations of the MLA in late 2020 (see our blog post here).