Blumenthal Applauds CFPB Action Against Predatory Lenders Targeting Military Servicemembers

(Hartford, CT) – U.S. Senator Richard Blumenthal (D-Conn.) today released the following statement after the Consumer Financial Protection Bureau (CFPB) took action against Freedom Stores, Inc., Freedom Acceptance Corporation, and Military Credit Services LLC for illegal debt collection practices against servicemembers. In March and August, Senator Blumenthal led letters calling for CFPB to use its enforcement authority to crack down on companies that abuse judicial and administrative processes to harass service members, exactly the conduct these entities are accused of engaging in. Senator Blumenthal has also repeatedly called on the Department of Defense to reform its allotment system, which the companies appear to have used to collect from servicemembers.

“I applaud the Consumer Financial Protection Bureau for responding to my request that they do more to protect our brave men and women in uniform from abusive lending practices.

“This case points to a broader problem: unscrupulous creditors appear to have used the Defense Department’s own payroll system to prey on servicemembers by garnishing their pay without giving them an adequate opportunity to contest a debt. I call on the Pentagon to immediately reconsider its process for garnishing servicemember pay to ensure that servicemembers’ rights are protected. The Defense Department should stop serving as a collection agency for predatory lenders.”