Auto finance companies were sent a joint letter from the US Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) offering them additional protection to military families under the Servicemembers Civil Relief Act (SCRA).
The CFPB said in a statement, while non-military borrowers have the same rights as servicemembers, SCRA provides additional rights to protect people in the armed forces and their families from unique financial challenges. Press release Friday (July 29).
Rohit Chopra, director, CFPB, said, “auto finance companies that follow rules should not be harmed by competitors who violate the legal rights of military families.” “The CFPB is closely monitoring the auto finance industry to ensure that service members and their families are being treated fairly.”
See also: CFPB slaps US bank with $37.5M fine on unauthorized accounts
The CFPB, referring to its research, found that civilians serving in the military took out more auto loan loans at a younger age than civilians, partly because of the need for transportation while they were at a military base.
The release indicated that servicemembers are also more likely to be targeted by predatory lending practices because they enter the military with financial inexperience while paying regular salaries.
Read more: CFPB Issues $19M Fine Against Hyundai Over Credit Reporting
“The Civil Rights Division is entrusted with the responsibility of ensuring that the rights of the brave men and women of our nation’s armed forces are protected from discrimination and unfair treatment,” the Assistant Attorney General said. kristen clark,
“We work every day to ensure that these rights, including those related to auto financing, are protected through litigation, outreach and policy development,” Clark said.
The purpose of the letter is to ensure that auto finance companies are aware of key provisions within the SCRA, including wrongful vehicle possession, vehicle lease termination provisions, interest rate benefits and other details.