Skip to main content
Press Release

Justice Department and the Consumer Financial Protection Bureau Underscore Legal Obligations of Auto Finance Companies During Military Consumer Month

For Immediate Release
Office of Public Affairs

The Department of Justice and the Consumer Financial Protection Bureau (CFPB) issued a joint letter today reminding auto lenders and leasing companies of their responsibilities to recognize important legal protections that exist for members of the military and their dependents under the Servicemembers Civil Relief Act (SCRA). Under the SCRA, servicemembers have additional rights and protections given the unique financial challenges that often emerge because of their service. July is Military Consumer Month, which is dedicated to raising awareness of consumer protections and promoting financial readiness for servicemembers, veterans and their families.

“The Civil Rights Division is entrusted with the responsibility of ensuring that the rights of those serving in our nation’s armed forces are safeguarded from discrimination and unfair treatment,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Auto lenders and leasing companies across the nation have an obligation to ensure the fair and lawful treatment of servicemembers.”

“Auto finance companies that play by the rules should not be disadvantaged by competitors that violate the legal rights of military families,” said CFPB Director Rohit Chopra. “The CFPB is closely monitoring the auto finance industry to ensure that servicemembers and their families are being treated fairly.”

Recent CFPB research has shown that servicemembers tend to carry more auto loan debt at younger ages than their civilian counterparts, largely due to the need for transportation while living on a military base. Servicemembers are also the common target of unfair or predatory practices, including costly loans and expensive contracts, because of the financial inexperience of many entering the service as young adults, combined with their steady paychecks and ability to structure payments through the military allotment system.

The letter is designed to ensure that auto finance companies are aware of key provisions within the SCRA that protect servicemembers and their families against certain unlawful auto financing practices, including:

  • Wrongful vehicle repossessions – The SCRA prohibits an auto finance company from repossessing a vehicle during the borrower’s military service without a court order, if the borrower financed or leased the vehicle prior to entering military service.
  • Failure to terminate vehicle leases without penalty – The SCRA allows servicemembers to terminate motor vehicle leases early and without penalty after entering military service or receiving qualifying 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 incurred prior to military service to no more than 6% per year, including most fees. If servicemembers make a proper request, a creditor must forgive and not defer any interest greater than 6%.

The Justice Department’s Servicemembers and Veterans Initiative coordinates with federal resources and information to build a comprehensive legal support and protection network focused on serving servicemembers, veterans and their families. The initiative’s mission is to support the department in its efforts to protect those who protect us all. For more information, please visit

Consumers encountering problems with auto servicing can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to

Updated May 2, 2023

Servicemembers Initiative
Civil Rights
Press Release Number: 22-813