U.S. Senators Jack Reed (RI), Sherrod Brown (OH) and other Senators have introduced a bill enhancing the Consumer Financial Protection Bureau’s (CFPB) ability to protect servicemembers and veterans from abuses in the financial marketplace by giving it jurisdiction over enforcing key parts of the Servicemembers Civil Relief Act (SCRA).
The Military Consumer Enforcement Act is a really big deal.
The U.S. PIRG says the CFPB and its Office of Servicemember Affairs have already demonstrated a strong commitment to protecting those who serve. For example, it has taken at least 12 major legal actions against financial firms targeting young servicemembers, older veterans and their families, securing approximately $130 million in relief for them. It has also successfully investigated banks to ensure compliance with the Military Lending Act.
And it has handled over 72,000 complaints from the military community.
But the SCRA offers important additional protections that have been, at best, unevenly enforced by other regulators. The SCRA includes provisions that prohibit the eviction of military members and their dependents from rental or mortgaged property, and the law caps interest at 6% on debts incurred prior to an individual entering active duty military service.
Given its proven track record for protecting our military community, giving the CFPB the jurisdiction over key parts of the SCRA means that the law will actually be enforced. These Senators have the right idea – we should be strengthening the CFPB’s ability to protect those who serve.
Why do others want to weaken the watchdog?
While we commend the Senators for this effort, we also warn the entire Senate that it must reject threats to the CFPB. Threats include the House-passed Financial Choice Act, HR 10, and proposals from other Senators to weaken the CFPB. The better-named Wrong Choice Act would leave the CFPB an unrecognizable husk and also roll back most of the Dodd-Frank Act’s other protections against another collapse of our financial system and economy.
Dismantling the CFPB would place servicemembers, veterans and their families in “financial harm’s way,” thereby threatening unit preparedness since financial problems are a leading cause of revocation of security clearances.
Our troops, their families and our veterans and all the rest of us deserve a strong watchdog protecting their interests. That watchdog is the CFPB.”
Other original co-sponsors of the Military Consumer Enforcement Act include Sens. Jon Tester (Mont.), Richard Blumenthal (Conn.), Tim Kaine (Va.), Tammy Duckworth (Ill.), Elizabeth Warren (Mass.), Tammy Baldwin (Wis.), Al Franken (Minn.), Amy Klobuchar (Minn.), Chris Van Hollen (Md.) and Catherine Cortez-Masto (Nev.).
U.S. PIRG is the federation of state Public Interest Research Groups.
Meanwhile, Public Citizen, Americans for Financial Reform, the Consumer Federation of America, and the National Consumer Law Center also applaud U.S. Sens. Jack Reed (D-R.I.), Sherrod Brown (D-Ohio) and their colleagues for reintroducing the Military Consumer Enforcement Act, which would empower the U.S. Consumer Financial Protection Bureau (CFPB) to oversee and enforce certain provisions of the Servicemember Civil Relief Act (SCRA).
Passed in 2003, SCRA was intended to ease economic burdens on military personnel and ensure military readiness by extending rights to service members and protecting them against default judgments, foreclosures and repossessions.
“Predatory schemes frequently target service members and their families,” said Lisa Donner, Executive Director of Americans for Financial Reform. “This legislation grants the CFPB the authority it needs to effectively enforce crucial SCRA protections that make sure banks can’t put military families out on the street or seize their cars in violation of the law.”
“This legislation is needed now more than ever,” said Lisa Gilbert, Vice President of legislative affairs for Public Citizen. “As banks and lenders force consumers into secret arbitration and block even our service members from enforcing basic rights in court, our last line of defense is federal intervention.”
“The CFPB has a strong record of safeguarding military families from financial fraudsters,” said Michael Best, senior policy advocate with the Consumer Federation of America. “By equipping the agency with new tools, it can continue to protect consumers and companies that play by the rules.”
The U.S. Office of Servicemember Affairs at the CFPB has long served as a watchdog for military personnel and has been immensely effective at servicing the distinct financial needs of military families. Military leaders nationwide have lauded the work of the consumer agency and its dedicated military unit.
Earlier this year, military family and consumer advocates told the Senate Armed Services Committee about the need to vigorously enforce laws combatting financial fraud that specifically target the military community. Last month, 29 leading military and veterans groups and two grassroots organizations representing U.S. veterans and military family members sent separate letters urging members of Congress to defend the CFPB against threats to its authority, structure and funding.