Florida Toughens Penalties for Scammers of Vets, Military

Holly Petraeus, backed by dozens of veterans and flanked on her right by Florida Attorney General Pam Bondi and Gov. Rick Scott, speaks at the Florida bill signing Monday at MacDill Air Force Base.

Holly Petraeus, backed by dozens of veterans and flanked on her right by Florida Attorney General Pam Bondi and Gov. Rick Scott, speaks at the Florida bill signing Monday at MacDill Air Force Base.

Whether they’re offering predatory car loans or trying to sell burial services at the National Cemeteries  – there are scammers who prey on active-duty military and veterans.

Monday, Florida Gov. Rick Scott signed HB 1223 that gives service members an added layer of protection from fraud and scams.

“The bill creates a significant civil penalty that will be added on top of restitution for attempting to steal from our veterans and  their families.” Scott said during a bill signing ceremony at Tampa’s MacDill Air Force Base. “This new layer of protection will send a strong message to the nation that in Florida we’ll do whatever ti takes to protect our veterans and their families. Continue reading

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Investigation: Military Still Targeted by Predatory Lenders

Photo courtesy of Pendleton.Marines.mil

Photo courtesy of Pendleton.Marines.mil

Service members are supposed to be protected from predatory lenders thanks to the Military Lending Act (MLA) in place for several years.

However, a joint investigation by Marketplace and ProPublica found that while the act did reduce the number of “payday loan” problems, the law does not regulate loans that extend beyond three months.

The MLA did little to regulate open-ended credit, or military installment loans longer than 91 days. Those are still available to service members, and in some cases aggressively sold to them. Some payday and title lenders have found ways to exploit gaps in the MLA, offering longer-term high-interest installment loans, sometimes backed by a car-title, that are not illegal but can send service members into a deepening spiral of debt.

Financial troubles are considered a serious threat to force readiness according to the Department of Defense.

At issue now, according to the report, are short-term high-interest cash loans. These “installment lenders” and pawn shops can be found outside the entrances of most military bases.

“I think it’s been a vexing problem for the military,” says Holly Petraeus, assistant director of the new Consumer Financial Protection Bureau in Washington.

She points out that the Department of Defense has tried hard to offer alternatives, providing low-cost emergency loans to low-income, cash-strapped military families. But there’s some paperwork involved, and permission from someone up the chain of command may be required, and follow-up financial counseling is strongly encouraged.

“People don’t want to come in and say they’ve messed up their finances,” she says. “And yet, with products where they’re just repeatedly paying large fees to borrow the same small amounts every month—you’re going to end up in a terrible financial mess, and with the real potential of losing your security clearance.”

You can read the full Marketplace and ProPublica report and check out the entire series HERE.

 

Protecting Military Families from Predatory Lenders

Holly Petraeus, Assistant Director for Service member Affairs, speaks with service members at Ft. Myer in Arlington, VA. Photo courtesy of the CFPB website.

Military family finances will be the topic of two town hall meetings Tuesday in Jacksonville, Florida and featuring Holly Petraeus, the assistant director of Consumer Financial Protection Bureau and wife of CIA Director David Petraeus, retired Army General.

Holly Petraeus will be joined by Florida Lt. Governor Jennifer Carroll, a Navy veteran, for the meetings at the Naval Station  Mayport which are open to military service members.

They hope to hear directly from sailors, service members and their families about their financial concerns. Mrs. Petraeus recently listed what she’s found to be the top financial issues concerning military families:

  • The Housing Meltdown – military families are hit hard when they receive orders to move. Often they can’t sell, they can’t rent and can’t refinance.
  • Aggressive marketing by for-profit colleges to military personnel and their families.
  • Car loans where service members are often sold clunkers at inflated prices with high financing charges.

In the article, Mrs. Petraeus writes:

A big part of my job is to educate service members about their rights under existing consumer financial laws, and to give them the information they need to make wise financial decisions. I will continue to work to help identify effective consumer protection measures that will work on behalf of military service members.

You can read more on the Consumer Financial Protection Bureau blog HERE.

Holly Petraeus Touts Consumer Protection for Soldiers

Holly Petraeus, Assistant Director for Servicemember Affairs, speaks with servicemembers at Ft. Myer in Arlington, VA. Photo courtesy of the CFPB website.

Military servicemembers, veterans and their families are vulnerable to sometimes unscrupulous lenders for several reasons according to the Consumer Protection Financial Bureau website for servicemembers. Several reasons are cited:

  • Lenders are aware that military servicemembers are required to maintain good finances.
  • Lenders are confident they can collect because servicemembers are easy to find.
  • Lenders are attracted because military pay is a steady income that they can garnish.
  • Military families tend to be young and “first time decision makers” when it comes to big purchases.
Blake Farmer, a reporter with WLPN, caught up with Holly Petraeus, wife of the four star general and next CIA director, who now oversees  the CFPB office focused on service members. Petraeus has been visiting military installations and was at Fort Campbell Wednesday.

Petraeus said the number one cause for military security clearance being revoked is now financial problems.

Like many Army posts, just outside Fort Campbell are used car lots, payday lenders and signs advertising special deals for soldiers.

Holly Petraeus and a soldier. Photo by SSG Lorie Jewell, US Army.

Petraeus said a servicemember’s paycheck may not be big, but it comes every two weeks. Farmer reports that law enforcement officials say for-profit colleges are pushing soldiers into programs harder than ever and payday lenders have found ways around interest rate caps. To read Blake Farmer’s story on Holly Petraeus click HERE.

Money problems can also add to the stress already being felt by military families due to frequent moves and multiple deployments. But there are resources to help:

Petraeus and her team at Servicemember Affairs also are looking for military families to tell your story – good or bad – so that others may learn from the experience.


Holly Petraeus: A Military Family Financial Watchdog

Below is a blog entry announcing Holly Petraeus’ new role to protect military families from unfair lending practices, give military families a voice and prepare them for “financial readiness.”

Holly Petraeus, photo courtesy of military.com

This entry is from the White House Blog and was posted by Elizabeth Warren on Jan. 6, 2011.

Today, nearly 300,000 American men and women are serving overseas, often in harsh conditions and at grave risk.  For many of these brave men and women, the challenge of everyday life experienced by their families back home is a significant worry, as loved ones struggle with car payments, credit card bills, and trying to find the cash needed to cover unexpected expenses.

Regrettably, the evidence is clear:  servicemembers and their families are sometimes easy targets for unscrupulous lenders.  Even families that stay with mainstream lenders can struggle as the impact of separation and frequent moving takes a financial toll, leaving a family mired in debt and trying to digest reams of fine print.

Today, we have good news to report.

Holly Petraeus will take on a new role at the Consumer Financial Protection Bureau Implementation Team, directing our effort to establish an Office of Servicemember Affairs.

Elizabeth Warren is assistant to the president and special advisor on consumer protection.

I had been at the consumer agency for only a couple of weeks when I met Holly.  After we introduced ourselves, she got straight to the point: despite strong efforts by the Department of Defense and others, too many military families find themselves in financial trouble, scrambling hard to deal with mounting debts or falling into the arms of a predatory lender.

Holly was then serving as the Director of the Better Business Bureau (BBB) Military Line, a partnership between the BBB and the Department of Defense Financial Readiness Campaign that provides consumer education and advocacy for servicemembers and their families.  She knew the challenges facing military families.  Her son, brother, father, grandfather, and great-grandfather all served in our armed forces.  Her husband, General David Petraeus, is serving now as Commander of the International Security Assistance Force and U.S. Forces in Afghanistan.

Holly was doing her best to help by teaching financial education classes to military personnel and in other ways, but she thought that as a country we needed to do more—and she thought the new consumer agency was the way to get things done.  She listed one idea after another, focusing on better law enforcement, tighter rules, and stronger financial education.  She wanted to see action now.

Wow, I thought.  This woman is fired up.

It soon became clear that Holly would be the perfect person to guide the establishment of the office.  She is the kind of leader we need.

Holly understands—from both her personal experience as a military spouse and her work at BBB—that men and women in our armed forces encounter unique financial obstacles.

Recently-enlisted servicemembers often experience their first steady paycheck and their first opportunity to be lured into easy credit offers.  Far too many also get tangled in debt traps.  A recent online survey commissioned by the FINRA Foundation found that almost one in four of the enlisted personnel or junior NCO respondents had used a high-cost alternative borrowing method, such as a payday or auto title loan, in the previous five years.  The same survey found that mainstream credit products can also pose problems: in the previous year, 53 percent of the enlisted personnel and junior NCOs had made only the minimum payment on a credit card, and 30 percent had made a late payment.

Financial problems can be a dangerous distraction for our troops.  As Undersecretary of Defense for Personnel and Readiness Clifford L. Stanley wrote last year, servicemembers “and their families are under increasing stress.  When we have asked in surveys about the causes, servicemembers responded that finances were second only behind work and career concerns and ahead of deployments, health, life events, family relationships and war/hostilities.”  Financial problems can also lead troops to lose their often essential security clearances.  For example, the Department of the Navy reported in 2007 that financial management issues accounted for 78 percent of security clearance revocations and denials for Navy personnel.

Those who serve in the military should be able to focus on their jobs and their families without having to worry about getting trapped by abusive financial practices.  America’s national security depends on that basic premise.  As Undersecretary Stanley wrote, the “personal financial readiness of our troops and families equates to mission readiness.”  Secretary of the Army John McHugh similarly has argued that “Soldiers who are distracted by financial issues at home are not fully focused on fighting the enemy, thereby decreasing mission readiness.”

In her role at the new agency, Holly will continue her work to strengthen consumer financial protection for servicemembers.  The Office of Servicemember Affairs will work in partnership with the Department of Defense to help ensure that: military families receive the financial education they need to make the best financial decisions for them; complaints and questions from military families are monitored and responded to; and federal and state agencies coordinate their activities to improve consumer protection measures for military families.

This month, Holly and I will visit Lackland Air Force base in San Antonio, Texas, where all three of my brothers took basic training.  We will hear from servicemembers and financial counselors about the unique lending circumstances and challenges facing military communities.  In this and in our later trips, we will ask many questions, listen to our troops, and apply what we learn directly to our efforts.

The goal of the new agency is to provide basic consumer protection and to be a voice for American families.  Military families have unique challenges, and now they have a unique advocate to ensure that their special concerns get the attention they deserve.

Elizabeth Warren is Assistant to the President and Special Advisor to the Secretary of the Treasury for the Consumer Financial Protection Bureau

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