U.S. Bancorp is set to refund $6.5 million because of deceptive lending practices aimed at military service members.
Officials said the announcement highlights problems with the military’s so-called allotment system, which allows members to have loan payments deducted directly from their paychecks. Military personnel sometimes wind up paying extra processing fees as a result of this system, and lenders who receive automatic payments may issue loans that are not necessarily affordable, bureau officials said. “Today’s action reflects our determination to act to protect service members against harmful practices in the consumer financial marketplace,” said bureau Director Richard Cordray.
There is a lot of damage that the banks have been doing to service members whether through mortgages or car loans. This is the reason why the Consumer Financial Protection Bureau was so important to create.