Trump administration mulls changes to financial protections for military members: report

Trump administration mulls changes to financial protections for military members: report
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The Trump administration is considering rolling back financial protections designed to protect military members from being targeted by predatory lending practices, according to an NPR report published on Monday.

NPR said it obtained documents that show the White House is looking at proposals that would curtail rules barring auto dealers from offering “gap insurance” to service members and show that the administration is considering a more broad rollback of enforcing the Military Lending Act.

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Guidelines from the Department of Defense bar automobile dealers from offering gap insurance, which covers the difference between the amount an owner owes on their car and the car's cash value, to service members.

The administration reportedly recently sent a proposal to the Department of Defense with revised rules that would allow dealers to offer gap insurance to service members again, NPR reported. 

"If the White House does this, it will be manipulating the Military Lending Act regulations at the behest of auto dealers and banks to try and make it easier to sell overpriced rip-off products to military service members," University of Utah law professor Christopher Peterson told NPR.

Paul Metrey, vice president of regulatory affairs for the National Automobile Dealers Association, insisted the Military Lending Act currently prevents service members from accessing potentially useful products, such as gap insurance.

President TrumpDonald John TrumpForget the spin: Five unrefuted Mueller Report revelations Lara Trump: Merkel admitting migrants 'one of the worst things that ever happened to Germany' Financial satisfaction hits record high: survey MORE earlier this year targeted another auto-lending guideline.

The president signed on to a congressional resolution that repealed auto-lending guidance from the Consumer Financial Protection Bureau (CFPB) designed to protect minority customers from predatory lending practices.

The CFPB is also planning to stop regularly checking in on payday lenders to see if they are engaging in practices that hurt service members, a routine initiated under the Military Lending Act, according to The New York Times. The Military Lending Act is designed to protect service members from financial fraud and shady lending practices.

The bureau has insisted it does not have the authority to routinely examine lenders under the act, according to NPR.   

The CFPB will continue to address complaints brought by service members against companies they think are engaging in financial fraud and predatory loans, however, the Times reported.