If you follow financial regulation, you’ve probably heard the headlines: the CFPB’s budget was slashed by nearly half. Its enforcement lawsuits are being transferred to another agency. It has no permanent director.
For lenders and property managers subject to the Servicemembers Civil Relief Act (SCRA), this might sound like a reprieve. Less funding must mean less enforcement. right?
Wrong. SCRA enforcement is intensifying, not retreating. Here’s what’s actually happening and why it matters for your compliance program.
What Happened to the CFPB
The “One Big Beautiful Bill Act,” signed into law on July 4, 2025, cut the CFPB’s maximum funding from 12% to 6.5% of Federal Reserve earnings. nearly half. The cut explicitly impacts the Office of Servicemember Affairs, the CFPB unit responsible for military financial protection.
The agency’s leadership is also in limbo. Jonathan McKernan’s nomination as permanent CFPB director was withdrawn in May 2025 when he was nominated for a Treasury position instead. Acting Director Russell Vought, who also serves as OMB Director, remains in charge. No replacement nominee has been announced.
By November 2025, the CFPB began transferring its remaining enforcement lawsuits to the Department of Justice.
The Office of Servicemember Affairs Has Been Gutted
The damage goes deeper than budget cuts. The CFPB’s Office of Servicemember Affairs, the unit specifically created under Dodd-Frank to protect active-duty servicemembers and their families, has been reduced to essentially zero functional staff through April 2025 reduction-in-force actions.
Josh Friedman, an Air Force veteran working in the OSA, was issued a RIF notice while serving on active duty at the Pentagon. He testified that all or nearly all of the office staff had been fired, despite Dodd-Frank requiring the agency to maintain the office.
The CFPB has also withdrawn 67 regulatory guidance documents, including the June 2021 interpretive rule that established MLA examination authority (86 FR 32723). Without this rule, routine supervisory examinations of lenders for Military Lending Act compliance are effectively suspended. The withdrawal was published in the Federal Register on May 12, 2025.
What this means in practice: the federal agency responsible for catching compliance problems through routine examinations is no longer examining. Violations that CFPB examiners would have flagged during supervisory visits now accumulate undetected until a servicemember files a complaint and the DOJ investigates. By then, what might have been a single correctable issue has become a multi-year pattern with millions in exposure.
On paper, this looks like a weakened enforcement landscape. In practice, it’s the opposite.
The DOJ Is a Tougher Enforcer
The DOJ’s Civil Division reorganized in September 2025, creating a new “Enforcement and Affirmative Litigation Branch”. and when the CFPB began transferring its enforcement lawsuits two months later, this branch was already positioned to absorb the caseload. This is a structural investment in enforcement capacity, not a wind-down.
And the DOJ’s track record on SCRA is significantly more aggressive than the CFPB’s:
| Agency | Total SCRA/MLA Relief | Servicemembers Helped |
|---|---|---|
| DOJ (since 2011) | $400M+ | ~149,000 |
| CFPB (since 2011) | $183M | . |
The DOJ has recovered nearly three times as much for servicemembers as the CFPB. And SCRA enforcement has been sustained across both parties, with enforcement actions spanning four consecutive administrations. The current administration has listed “protecting the rights of members of the military” as a Civil Rights Division priority.
This isn’t a partisan issue. It’s a bipartisan enforcement consensus.
Recent DOJ Actions Confirm the Trend
If you’re wondering whether the DOJ is slowing down, the 2025 enforcement record says otherwise.
Greystar: $1.4M for Automated SCRA Violations (June 2025)
Greystar Management Services, the nation’s largest property management company (800,000+ units), agreed to pay $1.4 million. $1.35M in restitution plus a $77,370 civil penalty. for imposing illegal early termination fees on servicemembers who terminated leases after receiving military relocation orders.
The root cause: Greystar’s property management software automatically applied termination fees without checking whether the tenant was SCRA-protected. Staff were supposed to manually override the charges, but no adequate controls existed.
The DOJ required Greystar to adopt SCRA-compliant software across all properties, hire an independent consultant to audit lease terminations dating back to 2018, and submit quarterly reports to the DOJ for five years. See our guide on consent decree compliance for what these obligations look like in practice.
Read more: How Greystar’s Settlement Changes SCRA Compliance for Property Managers
JWB Property Management: $64K for 6 Violations (June 2025)
Greystar isn’t the only property manager in the DOJ’s crosshairs. JWB Property Management, a single-market property manager in Jacksonville, Florida, paid $64,168 for just six SCRA violations. imposing early termination charges on servicemembers who terminated leases after receiving relocation orders.
The takeaway: there is no “too small to enforce against” threshold. If you manage rental properties near a military installation, the DOJ has demonstrated it will pursue enforcement regardless of your company’s size.
Morningstar Properties: $130K for Auctioning a Deployed Servicemember’s Belongings (February 2025)
A self-storage operator auctioned the belongings of at least three SCRA-protected servicemembers without obtaining required court orders. One Air Force Staff Sergeant stationed at MacDill AFB had stored nearly all household goods before deploying overseas to Jordan. The DOJ secured $130,000. including $80,000 for one servicemember and $5,000 each to two others. plus a $40,000 civil penalty.
State Attorneys General Are Filling the Gap
As the CFPB scales back, state attorneys general are stepping in as independent SCRA enforcers. creating a multi-front enforcement risk that didn’t exist five years ago.
Washington State has emerged as a particularly active enforcer:
- Greystar (2025): Washington AG brought a parallel state action alongside the DOJ’s federal case, barring Greystar from charging illegal termination fees in the state and requiring removal of negative credit marks.
- Olympic Management Company (2025): A Fife, WA property manager was ordered to pay $46,000+ in refunds and interest to 22 servicemembers for unlawful lease termination fees.
When state AGs pursue SCRA violations independently of federal action, companies face potential enforcement from multiple directions simultaneously. A single SCRA compliance failure can trigger both a DOJ investigation and state AG enforcement. with separate penalties, separate remediation requirements, and separate consent orders.
The Penalties Keep Rising
SCRA civil penalties increase automatically every year under the Federal Civil Penalties Inflation Adjustment Act. The DOJ’s most recent penalty adjustment took effect July 3, 2025.
Current penalty amounts:
| Violation | Amount |
|---|---|
| First violation | $79,380 |
| Subsequent violations | $158,761 |
Amounts shown reflect the July 2025 inflation adjustment (Federal Register 2025-12494).
These are per-violation penalties on top of restitution to affected servicemembers. For a property management company with 50 SCRA-protected tenants who were charged improper termination fees, the penalty exposure alone could approach $8 million. before any restitution, legal costs, or remediation expenses.
What This Means for Your Compliance Program
The enforcement landscape hasn’t weakened. It has restructured. and the new structure is arguably more aggressive than what came before it:
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The DOJ is the primary federal enforcer. The agency with the most aggressive SCRA track record ($400M+ since 2011) now owns the full enforcement portfolio.
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A new DOJ enforcement branch is positioned to handle these cases. The Enforcement and Affirmative Litigation Branch was already in place when the CFPB transfer began. a structural commitment to sustained enforcement capacity.
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State AGs are pursuing SCRA violations independently. You now face potential enforcement from federal AND state regulators simultaneously.
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Penalties increase automatically every year. The cost of non-compliance rises regardless of which party controls the White House or Congress.
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Bipartisan consensus means no political reprieve. SCRA enforcement has maintained or accelerated across four consecutive administrations of both parties.
If your SCRA compliance process relies on manual checks, employee training alone, or property management software that doesn’t identify military tenants before applying fees and charges, the risk hasn’t decreased. It has increased. Continuous monitoring that catches status changes before they become violations is the baseline the DOJ now expects.
For a complete overview of every SCRA obligation and how to build a compliance program, see our SCRA compliance guide.
$400 million+ in SCRA settlements and penalties. Every one started with a process gap that could have been caught. How confident are you in yours?
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