Nearly 200 interest groups on Monday backed a Defense Department plan to crack down on abusive lending to those serving in the military.
In a letter to Defense Secretary Chuck HagelCharles (Chuck) Timothy HagelAfghan interpreter who helped rescue Biden: 'If they find me, they will kill me' Afghan interpreter who helped extract Biden, other senators in 2008 asks president to save him Democrats defend Afghan withdrawal amid Taliban advance MORE, 187 consumer, military and civil rights organizations said they supports efforts to close loopholes that are threatening the financial security of service members and their families.
Meanwhile, the Consumer Financial Protection Bureau (CFPB) released a report that pinpointed problems within the current rules that are allowing lenders to offer costly loans to military families.
Last year, Congress gave the CFPB the power to enforce the law.
In 2007, the Military Lending Act capped rates at 36 percent and applied other protections to payday loans with terms of 91 days or fewer and for an amount of $2,000 or less, vehicle title loans with terms of 181 days or less for any amount and tax refund anticipation loans.
But shortly after their implementation, lenders found some holes in the rules and began offering longer-term payday loans, auto title loans and lines of credit with triple-digit interest rates.
Under the new proposal, credit products would be subject to a 36 percent interest and fee cap as well as other protections regardless of the amount or length of the loan.