CFPB and Department of Justice warn auto finance companies about military protections

WASHINGTON DC – The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today issued a joint letter reminding auto finance companies of their responsibilities to recognize important legal protections for military families under the law on civil relief for the military (SCRA). While military members have the same rights as non-military borrowers, SCRA provides additional rights to protect military members and their families against unique financial challenges.

“Auto finance companies that follow the rules should not be disadvantaged by competitors who violate the legal rights of military families,” CFPB Director Rohit Chopra said. “CFPB closely monitors the auto finance industry to ensure military members and their families are treated fairly.”

“The Civil Rights Division is responsible for ensuring that the rights of the brave men and women of our nation’s armed forces are protected from discrimination and unfair treatment,” said Assistant Attorney General Kristen Clarke. “We work every day to ensure these rights, including those related to auto finance, are protected through litigation, advocacy and policy development.”

Recent CFPB research has shown that military members tend to have more car loan debt at a younger age than their civilian counterparts, largely due to the need for transportation while living on a military base. They are also often the target of unfair or predatory practices, including expensive loans and expensive contracts due to the financial inexperience of many entering the service as young adults, combined with their regular salaries and ability to structure payments through the military award system. CFPB Spring 2022 Surveillance Highlights also revealed unfair acts or practices, prohibited by the Consumer Financial Protection Act, in the automotive service industry.

The letter is designed to ensure auto finance companies are aware of key SCRA provisions, including:

  • Unjustified vehicle repossessions: The SCRA prohibits an auto finance company from repossessing a vehicle during the borrower’s military service without a court order, even if the borrower financed or leased the vehicle before entering service military.
  • Failure to Terminate Vehicle Leases Without Penalty: The SCRA allows service members to terminate motor vehicle leases early and without penalty after entering military service or receiving eligible military orders for a permanent change of station or deployment.
  • Violations of auto loan interest rate benefits: The SCRA also limits interest rates on loans taken out before military service to a maximum of 6% per annum, including most fees. If the military makes an appropriate request, a creditor must forgive and not defer any interest over 6%.

Read the joint letter to auto finance companies regarding the protection of military borrowers .

Consumers having problems with car maintenance can file a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected]


The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer finance law and ensures that markets for consumer financial products are fair, transparent and competitive. For more information, visit

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