On July 11, 2025, the Consumer Financial Protection Bureau (“CFPB”) entered a settlement and stipulated judgment with FirstCash, Inc. and its affiliates (collectively “FirstCash”), for alleged violations of the Military Lending Act (“MLA”), 10 U.S.C § 987. FirstCash operates a network of more than one thousand pawn shops across the United States. The settlement relates to a complaint filed by the CFPB in the Northern District of Texas on November 12, 2021. The complaint alleged that FirstCash’s pawnshops violated the MLA by extending loans to servicemembers at interest rates far exceeding the MLA’s statutory cap and by unlawfully requiring borrowers to arbitrate disputes. The complaint also alleged that FirstCash had violated a 2013 administrative order issued by the CFPB, which required an entity affiliated with FirstCash to comply with the MLA. The stipulated judgment, if entered by the Court, will require that FirstCash pay a civil penalty of four million dollars, provide redress for affected servicemembers, and bring its lending practices into compliance with the MLA.
The United States Congress enacted the MLA in 2006 to provide unique protections to active duty servicemembers and certain members of their families in connection with most consumer loans. Regulations promulgated by the Department of Defense implement the MLA. Specific protections offered by the MLA include a cap of 36% on annual percentage rates applied to loans to servicemembers, a prohibition of prepayment penalties, and a prohibition of mandatory arbitration. A 2013 amendment to the MLA empowers the CFPB to bring civil actions to enforce the Act.
Military Lending Act, MLA, Consumer Financial Protection Bureau, CFPB, FirstCash