Van Hollen, Reed Introduce Legislation to Protect Servicemembers and Military Families from Financial Fraud
U.S. Senator Chris Van Hollen (D-MD) joined U.S. Senator Jack Reed (D-RI) and 12 of their colleagues to introduce the Military Consumer Enforcement Act. This bill would protect servicemembers and military families from financial fraud by ensuring that enforcement of the Servicemember Civil Relief Act(SCRA) will be a permanent priority for the Consumer Financial Protection Bureau (CFPB) and empowering the CFPB to enforce compliance of certain existing provisions of the SCRA.
"Our nation's veterans sacrifice so much for their country. The least we can do is provide them with the strongest possible protections when they come home. The Military Consumer Enforcement Act is an important tool that will help safeguard veterans and their families from those who would seek to defraud them," said Senator Van Hollen.
The SCRA aims to ease financial burdens on servicemembers during periods of military service.For example, the SCRA includes provisions that prohibit the eviction of covered military members and their families from rental or mortgaged property. The SCRA also caps interest at 6 percent on debts incurred prior to an individual entering active duty military service.
Despite these SCRA protections, which Congress enacted to enable servicemembers to "devote their entire energy to the defense needs of the nation," enforcement of this critical law has been inconsistent and subject to the discretion of financial regulators. Without a change in the law, SCRA enforcement will continue to be subject to the changing priorities of financial regulators. The Military Consumer Enforcement Act would ensure that SCRA enforcement will be a permanent priority for the CFPB.
Last month, the CFPB's Office of Servicemember Affairs issued its most recent annual report to address complaints submitted by servicemembers, veterans, and their families. The report noted that since opening its doors in July of 2011, the CFPB's Office of Servicemember Affairs has handled 72,000 complaints from members of the military and visited nearly 150 military installations. For example, the CFPB has taken action to:
· Help secure tens of millions of dollars in debt relief for 17,000 servicemembers tricked into taking out high-cost loans for computers, videogames, and other electronics purchased at a chain of mall kiosks near military bases;
· Shut down a fee scam in which a retail chain called USA Discounters Ltd. charged tens of thousands of service members for protections that were either guaranteed by law or not actually provided;
· Direct U.S. Bank and a partner company to terminate their deceptive marketing of auto and installment loans and return $6.5 million in hidden fees to military borrowers;
· Order a major national auto lender to return $3.2 million in payments obtained through illegal debt-collection practices, including threats to report servicemembers to their commanding officers;
· Order Navy Federal Credit Union to pay $28.5 million in penalties and refunds for the use of a variety of illegal debt-collection tactics;
· Work with the FDIC to provide $60 million in compensation for more than 77,000 service members charged excess interest on student loans by Sallie Mae and Navient; and
· Help the U.S. Defense Department put teeth into the Military Lending Act, a bipartisan law that set a 36 percent interest rate cap on consumer loans to servicemembers.
Thebill is supported by more than 30 organizations representing the interests of servicemembers and their families, including: National Military Family Association, Military Officers Association of America, Veterans Education Success, Student Veterans of America, Consumer Federation of America, Americans for Financial Reform, Public Citizen, the Sargent Shriver National Center on Poverty Law, U.S. PIRG, Consumers Union, National Association of Consumer Advocates, National Consumer Law Center (on behalf of its low income clients), National Community Reinvestment Coalition, Center for Popular Democracy, Alliance for Justice, American Association for Justice, and Center for Responsible Lending.
The Military Consumer Protection Act is also cosponsored by U.S. Senators Jon Tester (D-MT),Sherrod Brown (D-OH), Dick Durbin (D-IL),Richard Blumenthal (D-CT), Tammy Duckworth (D-IL),Elizabeth Warren (D-MA),Tammy Baldwin (D-WI),Al Franken (D-MN),Amy Klobuchar (D-MN),Catherine Cortez Masto (D-NV),Bob Menendez (D-NJ),andMazie Hirono (D-HI).
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