CFPB Signals Strong Focus on Servicemember Financial Protections Under Trump Administration
Under the Trump administration, the Consumer Financial Protection Bureau (CFPB) has moved away from several enforcement priorities established during the Biden era. However, it has signaled a continued focus on safeguarding the financial rights of servicemembers. The following overview outlines this shift in priorities and examines the CFPB’s role in enforcing protections for military personnel.
Contents
CFPB’s Enforcement Stance
On April 18, 2025, CFPB Chief Legal Officer Mark Paoletta issued an internal memo stating that the agency would reallocate resources away from enforcement and supervision efforts that could be handled by state authorities. However, the memo emphasized that the bureau would continue protecting servicemembers.
This approach aligns with other recent CFPB announcements. On March 28, 2025, the agency stated it would deprioritize enforcement of penalties and fines under certain provisions of Payday, Vehicle Title, and High-Cost Installment Loans Regulation. Instead, it would focus its enforcement and supervision efforts on more urgent consumer threats, particularly those affecting servicemembers and veterans. The bureau made a similar statement, reiterating its focus on threats to servicemembers, when it announced reduced enforcement priorities for certain entities under Regulation B and for Buy Now, Pay Later loans under the Truth in Lending Act.
Additionally, the CFPB has dismissed or withdrawn over half of its pending enforcement cases and, in one case, moved to vacate a settlement agreement reached under the prior administration. Notably, however, the CFPB is continuing its lawsuit against fintech lender MoneyLion, alleging violations of the Military Lending Act.
CFPB’s Approach to Servicemember Protection Enforcement
Since the change in administration, the CFPB has not initiated any new enforcement actions. However, it is expected to resume enforcement activity, particularly related to the Military Lending Act’s (MLA) interest rate cap, as it did under the previous Trump administration. While the CFPB does not have direct authority to enforce the Servicemembers Civil Relief Act (SCRA), it actively monitors related complaints, works with the Department of Justice, and may exercise its UDAAP enforcement authority to protect servicemembers.
MLA Interest Rate Cap
The CFPB’s complaint against MoneyLion centers on allegations that the fintech lender overcharged servicemembers and their dependents fees that, when combined with disclosed interest charges, exceeded the Military Lending Act’s (MLA) 36% Military Annual Percentage Rate (MAPR) limit. The complaint also asserts that MoneyLion required covered borrowers to unlawfully agree to arbitration and failed to provide certain loan disclosures required under the MLA.
Interest rate protections have remained a consistent priority for the CFPB in its efforts to safeguard servicemembers’ financial rights. Although the Bureau does not enforce the Servicemembers Civil Relief Act (SCRA), it regularly addresses interest rate concerns associated with the statute.
For example, a 2022 CFPB report revealed that only a fraction of eligible servicemembers receive the interest rate reductions to which they are entitled. Additionally, both of the Bureau’s MLA-related webpages highlight interest rate caps more prominently than other protections. This emphasis is expected to persist under the Trump administration, as reflected in the continuation of the MoneyLion case, whose lead allegation involves violations of the MLA’s interest rate cap provisions.
UDAAP Violations
In its complaint against MoneyLion, the Consumer Financial Protection Bureau (CFPB) alleged several deceptive acts and practices that violated the Consumer Financial Protection Act (CFPA). Of the seven counts in the complaint, four are based on unfair, deceptive, or abusive acts or practices (UDAAP), rather than direct violations of the Military Lending Act (MLA).
These UDAAP allegations include:
- Informing borrowers that they owed principal and interest on loan balances, even though the loans were void under the MLA;
- Informing consumers by stating they could cancel membership programs at any time, when in fact cancellation was prohibited if there were outstanding loan balances or unpaid membership fees;
- Continuing to charge membership fees to customers who were unable to cancel due to insufficient funds to cover their unpaid balances; and
- Failing to provide functional customer service, with some consumers still being charged membership fees even after their loans were paid off and cancellation requests were submitted, due to payments being marked as “pending.”
These UDAAP violations mirror those identified under the FTC’s Negative Option Rule. The MoneyLion case shows the CFPB under the Trump administration is willing to apply these protections with respect to servicemembers.
Conclusion
Financial institutions, especially those that lend to servicemembers, should closely monitor the Trump administration’s renewed focus on enforcing protections for the military community. The ongoing litigation against MoneyLion is unlikely to be an isolated case.
To mitigate risk, institutions should ensure that their legal teams are well-versed in the requirements of both the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA). Special attention should be given to compliance with interest rate caps under both laws. Furthermore, issues related to disclosures and cancellation practices that could fall under Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) will likely remain a key area of scrutiny for the CFPB.
Ensuring SCRA compliance starts with verifying a borrower’s active duty status. For organizations looking to stay ahead of regulatory actions, SCRACVS offers a reliable way to confirm military status before proceeding with collections, evictions, or legal filings. Click here to sign up at SCRACVS and verify the active duty status.
