House panel kills delay to military lending rules

Lawmakers narrowly agreed to scrap a provision that would delay tougher lending protections for military members as part of an annual defense policy bill.

The original GOP version of the National Defense Authorization Act included language that would have delayed Defense Department rules aimed at preventing military families from abusive lending practices by requiring further study on it. But at roughly 4:30 in the morning, at the end of a lengthy markup, the House Armed Services Committee voted 32-30 to scrap the measure.

{mosads}Five Republicans joined the panel’s 27 Democrats in scrapping the amendment, allowing the Defense Department to go through with tougher new rules limiting the interest rates lenders can charge.

Rep. Tammy Duckworth (D-Ill.), who sponsored the amendment eliminating the delay, said she was proud to see it erased.

“The language inserted into the National Defense Authorization Act would have forced the Department of Defense to waste resources undertaking redundant studies and postpone the implementation of valuable protections,” she said in a statement.

In 2007, Congress passed legislation directing the Defense Department to write rules aimed at military lending, capping the interest rates military families could pay on loans at 36 percent. But some lenders worked around the new rules by tweaking the terms of their loans, so they no longer fit the products banned.

In turn, lawmakers pushed the Defense Department to tighten up their rules to close the loopholes, and the department proposed reworked rules in 2014. But advocates of the delay argued that the matter merited further study to ensure that legitimate lenders were not being blocked by the rules as well.

The Consumer Financial Protection Bureau has found that military families can be particularly vulnerable to predatory lending tactics, going so far as to establish an office within the agency devoted specifically to military matters. The bureau reported this month it had received 17,000 complaints about financial products from the military community in 2014.