DOJ, CFPB Warn Auto Finance Companies about Servicemember Protections

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The U.S. Department of Justice (“DOJ”) and the Consumer Finance Protection Bureau (“CFPB”) issued a joint letter reminding the auto finance industry to enforce certain interest rate restrictions and other consumer protection measures enjoyed by active duty service-members and their families. The joint letter advises auto finance providers to comply with protections afforded to active-duty service members and their dependents under the Servicemembers Civil Relief Act (“SCRA”). This law grants legal protections and financial benefits to service members that are not available to civilian consumers.

The Bureau has been focused on auto finance regulatory compliance for months. Earlier in the year the agency issued a compliance bulletin consisting of CFPB examinations and enforcement actions, including the illegal seizure of cars, sloppy record keeping, unreliable balance statements, and ransom for personal property.

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