U.S. PIRG Education Fund has a new report, co-written with the Frontier Group, on how the CFPB protects servicemembers and veterans from financial abuse.
Here’s an excerpt from the report Protecting Those Who Serve:
Download a two-page summary fact sheet about this report.
The men and women who serve in America’s military are also active consumers in America’s financial marketplace, where tricks and traps can cause harm to their finances and their lives. An analysis of more than 44,000 complaints submitted by active duty servicemembers and military veterans to the Consumer Financial Protection Bureau (CFPB) and contained in its Consumer Complaint Database finds that mistreatment of servicemembers by financial companies is widespread. The stories told in these complaints reinforce the importance of the CFPB’s work to hold financial companies accountable for wrongdoing, to secure restitution for mistreated consumers, and to help servicemembers and veterans avoid mistreatment in the financial marketplace.
The CFPB provides an invaluable service to America’s men and women in uniform. Attempts to weaken or eliminate the CFPB could put those who protect our country in harm’s way, both while serving abroad and here at home, and even threaten national security. The Pentagon has found that financial abuses and credit reporting mistakes can cause service members to lose security clearances, resulting in lower unit preparedness.
Servicemembers and veterans face unique challenges and threats in the financial marketplace.
- Active-duty members of the military are often young, relocate frequently, and are frequently deployed overseas, making them unusually vulnerable to certain types of mistreatment in the financial marketplace. Servicemembers are also concentrated on military bases that can make easy and profitable targets for predatory financial companies.
- Veterans may be targeted by predatory financial actors for their guaranteed income, because of loopholes in federal law, or based on physical or mental disabilities suffered while in service to the nation. Veterans may also be vulnerable to exploitation by companies representing themselves as friends of the military.
The CFPB is a critical ally for servicemembers and veterans.
- The CFPB’s establishing legislation required the creation of an Office of Servicemember Affairs to focus on protecting members of the military and their families.
- The CFPB has taken at least a dozen enforcement actions with specific benefits to servicemembers. In 2016, for example, the CFPB found that Navy Federal Credit Union had used illegal debt collection tactics, in some cases threatening to contact servicemembers’ commanding officers with information about their debt. As a result, the CFPB ordered Navy FCU to pay $23 million in redress to customers who had been wronged, along with a $5.5 million civil penalty. The CFPB has also taken action against for-profit colleges that used predatory tactics to recruit veterans.
- The CFPB has also advocated to strengthen consumer protections for servicemembers, including by successfully advocating to close loopholes in the Military Lending Act, which caps interest rates on loans to servicemembers.
- The CFPB provides valuable resources through its Office of Servicemember Affairs, including answers to servicemembers’ consumer questions.