[CREDIT: CFPB] President Trump has removed the CFPB's staff, funding and offices, leaving Americans and military families alone against predatory lenders and other cheats and scams.

WASHINGTON, DC — As an officer in the 82nd Airborne Division, Sen. Jack Reed (D-RI) was dismayed his troops were cheated by predatory lenders, so he knows Americans and military families lost crucial protections when President Donald Trump cancelled the Consumer Financial Protection Bureau (CFPB).

“I spent a lot of time talking to my troops and wondering why they signed a contract to buy a car with 250 percent interest. I thought that was a little outrageous. But more importantly, why would anyone try to exploit a soldier serving the nation and defending the nation?” Reed asked. “I discovered how soldiers, sailors, airmen, guardians are used by financial companies a long time ago.”

The Consumer Financial Protection Bureau (CFPB) protected working Americans like Reed’s troops from people eager to prey on them, and has returned more than $21 billion to American consumers who were ripped off by abusive and illegal financial activity since 2011, but the Trump Administration is working to dismantle the watchdog agency.

The Trump White House moved to dismiss the agency’s entire workforce, canceled the lease for the agency’s headquarters, suspended supervision of big banks, and dismissed open-and-shut cases against predatory lenders for deceiving consumers into paying usurious interest rates. Two weeks ago, Trump said in the Oval Office that his goal is for the CFPB to “be totally eliminated.” Billionaire Elon Musk—a White House employee who donated $288 million to Trump’s 2024 campaign and stands to personally benefit from rolling back the CFPB’s oversight capabilities— proposed “deleting” the agency.

Politico reported that in a federal court filing in Washington, Acting Director Vought has said in a letter to the Federal Reserve, the “Bureau’s new leadership will run a substantially more streamlined and efficient bureau,” meaning there will still be a CFPB.

But Reed said millions of Americans are now more likely to be scammed and ripped off by junk fees after the Trump Administration steps incapacitating the CFPB, set up after the last major financial crisis. Reed, who created CFPB’s Office of Servicemember Affairs to help protect military families from financial fraud, says the Trump Administration’s efforts to dismantle the CFPB increase financial risks to service members.

“Apparently the Trump-Musk administration thinks consumers never get the short end of the stick from unscrupulous businesses, but that’s not the experience of families. Billionaires don’t have to worry about having enough money to pay the mortgage and feed their kids, but the vast majority of Americans do. The CFPB exists so that every American has a strong consumer watchdog looking out for their financial well-being, preventing scams, stopping special interests from running amok, and holding offenders accountable. This is especially true for servicemembers, veterans, and their families, who are disproportionally targeted by predatory lenders and abusive mortgage, debt collection, payday lending, and auto lending schemes and often face greater financial risks than civilian borrowers due to the nature of their military service,” said Senator Reed. “Since the CFPB was created, it has made real progress taking on special interests, rooting out scammers, and punishing financial abuse, from deceptive mortgages to unfair credit card terms to unscrupulous payday lenders. We should be building on that progress, not tearing it down and empowering bad actors.”

CFPB Military Lending Act (MLA) protections nixed

The Trump Administration’s decision to stop supervision, enforcement, and litigation eliminates key Military Lending Act (MLA) protections that prevent servicemembers from being exploited. The financial and legal protections in these bipartisan laws–most notably a cap on interest rates on mortgages, credit cards, and auto loans–are critical to national defense and military readiness. Troops should focus on their service obligations while on active duty, rather than worrying about making ends meet at home.

U.S. service members submitted approximately 84,600 complaints to the CFPB in 2023, a 27 percent increase over the previous year.

Many elderly veterans are targeted for fraud and deceptive schemes, including scams operated by unaccredited veterans benefits claims agents, who charge exorbitant fees for illegitimate assistance with claims.

At a special CFPB forum in Washington, DC this week, Senator Reed had a chance to speak with Stacey McCall, an Army veteran who was trapped in a doom loop with an auto lender, unable to transfer her title back home after her assignment overseas ended and being unfairly charged for a Toyota vehicle she couldn’t drive. She worked for nearly a year to resolve it, unsuccessfully, until the CFPB came to the rescue.

Reed cited his experience in the military as one of the reasons for supporting a regulator whose mission is to focus on consumer protection and military families.

“Whether serving stateside or abroad, U.S. military personnel and their families and veterans deserve financial protection and a watchdog that actively looks out for their financial well-being. The CFPB’s Office of Servicemember Affairs has been staffed by real people who have done outstanding work providing personalized assistance to those in need. The Trump Administration is cutting that service off and as a result, more troops will lose their hard-earned paychecks and more families will fall victim to abusive and predatory financial practices,” said Reed.

The Senate Banking Committee plans to hold a confirmation hearing Thursday for Jonathan McKernan, President Trump’s nominee to lead the CFPB. Reed says he plans to ask Mr. McKernan about his plans to protect consumers, including military families, and take meaningful enforcement actions against predatory lending.

Author: Rob Borkowski

Rob has worked as reporter and editor for several publications, including The Kent County Daily Times and Coventry Courier, before working for Gatehouse in MA then moving home with Patch Media. Now he's publisher and editor of WarwickPost.com. Contact him at editor@warwickpost.com with tips, press releases, advertising inquiries, and concerns.

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