Acting White House Chief ofStaff Mick Mulvaney is no longer in charge of the CFPB, though onepublication notes his policy of reducing fines while at the CFPB"came to be known as the 'Mulvaney discount'" and is apparentlystill in play.(Photo: Shutterstock)

The Trump appointee leading the Consumer Financial ProtectionBureau, Kathy Kraninger, has overseen the fine of Mark Corbettafter it was determined that he sold veterans deceptive,high-interest loans. He was fined $1.

The Center for Responsible Lending, reporting on the fine, pointed out that theCFPB said in late 2018 that lenders to militarypersonnel would no longer be monitored for compliance withthe Military Lending Act, meant to protect veterans andsoldiers from predatory lending practices.

Then-acting director Mick Mulvaney said at the time that underDodd-Frank, the CFPB had no authority to audit lenders forcompliance with the Military Lending Act, reversing Obamaadministration interpretation of the law and causing protests fromDemocrats and the Pentagon.

A few weeks ago, the CFPB's Kraninger requested Congress give theCFPB "clear authority" to "supervise" lenders forcompliance with the Military Lending Act.

Esquire highlighted the size of the $1 penalty forCorbett in excoriating the actions of the CFPB under Mulvaney,whose policy of reducing fines for violations of consumerprotection laws "had become so widespread that it came to be knownas the 'Mulvaney discount.'"

The report also lamented the fact that the policy has apparentlysurvived Mulvaney's departure from the agency.

Military.com reported that in a consent order, the CFPB found that Corbett'sactions "were deceptive and unfair and likely caused 'substantialinjury' to veterans." But apparently the CFPB  felt thattelling him to stop, fining him $1 and ordering him to cooperatewith an ongoing investigation was sufficient punishment, citingCorbett's sworn statement about inability to pay more of afine.

The scheme took advantage of veterans who sought loans orpension sales. Corbett found investors interested inbuying veterans' income streams in exchange for "a payment rangingfrom a few thousand to tens of thousands of dollars; in exchange,[the veterans] would repay a much larger amount by signing over toinvestors all or part of their monthly pension or disabilitypayments, typically for five to 10 years."

The veterans were not told, incidentally, about either theinterest rates—as much as 40 percent in one case currently before a district court judge in SouthCarolina—or Corbett's commission. One of theveterans suing Corbett and others in SouthCarolina, Chad Wright, gave up his pension tostave off homelessness for his family.

The contracts compelled vets to go into their Department ofVeterans Affairs or Defense Finance and Accounting Service onlineportal and send their benefits directly into an investor-controlledbank account.

If the contract was for just part of a pension, the companieswould get the veterans' whole direct deposit or monthly allotmentand then send part of it back to the veterans' accounts.

Federal law says that "veterans'pension payments are unassignable" — and this was noted in theconsent order.