WASHINGTON, DC – U.S. Senators Jack Reed (D-RI) and Sherrod Brown (D-OH) today urged their fellow Senators to ensure that the Consumer Financial Protection Bureau remains a strong, independent agency so it can continue to safeguard military families and veterans from financial abuse.
Brown and Reed released a brief video highlighting Congressional testimony from the senior enlisted advisors from the Army, Navy, Marine Corps, and Air Force praising the CFPB’s work on behalf of servicemembers and their families.
In a letter to their Senate colleagues, Brown and Reed noted that the CFPB's Office of Servicemember Affairs has handled more than 70,000 complaints from servicemembers and provided financial education at 148 military facilities nationwide. The pair called on Senators to resist efforts by the CFPB’s critics to undermine the bureau’s ability to carry out this mission by weakening its structure, funding, or independence. Brown and Reed are the ranking members of the Banking, Housing, and Urban Affairs Committee, and the Armed Services Committee, respectively.
“CFPB enforcement and supervision makes it less likely that men and women on active duty are distracted by debt collectors, payday lenders, or problems with their mortgage servicers,” Brown and Reed wrote. “If Congress really wants to provide our servicemembers and their families with the best resources, then we should continue to support an independent and strong CFPB. We should further empower the CFPB to fight for our servicemembers and their families, while they fight to protect and defend us.”
Reed and Brown stressed that a bad credit report, a debt-collection action, or other financial problem can harm a servicemember’s career as well as a unit’s mission readiness. According to estimates, between 4,700 and 8,000 military personnel are involuntarily separated from service each year due to financial problems, with associated costs to the military of as much as $57,333 per separation. In addition, more than 1,100 servicemembers lost their security clearances due to financial issues in fiscal 2013 alone.
Since opening its doors in 2011, the CFPB has returned nearly $12 billion to the pockets of 29 million Americans who have been cheated by shadowy debt collectors, for-profit schools, and payday lenders, according to the agency. The CFPB has taken actions against companies that add on hidden fees to credit cards, attempt to collect on debt that has already been paid off, discriminate against minorities, or use deceptive marketing to sell financial products. And because of the CFPB, banks can no longer offer mortgages to people who cannot afford to repay them.
The full text of the Senators’ letter follows:
March 27, 2017
The financial well-being of America’s military community is a critical component of our country’s military readiness. We write to bring to your attention the important work that the Consumer Financial Protection Bureau (CFPB) and its Office of Servicemember Affairs have been doing on behalf of our servicemembers, veterans, and their families. We urge you to resist any attempts by critics of the CFPB to make the Bureau less effective in fulfilling this mission by weakening its structure or authorities.
According to the Military Compensation and Retirement Modernization Commission report, financial problems affect readiness. According to estimates, thousands of troops are involuntarily separated from service each year due to financial problems, with associated costs to the military of as much as $57,333 per separation. The cost may be even higher for experienced Non-Commissioned Officers. Additionally, many other servicemembers lose security clearances every year due to personal finance issues, often affecting the mission readiness of their unit. For example, the Commission’s report notes that “in FY 2013, financial issues were the fourth highest-ranking reason for losing security clearances, costing 1,129 military Service members their security clearance.” These numbers are not news to anyone familiar with military life. Financial issues can have dire consequences.
After the 2008 financial crisis, Congress created the Consumer Financial Protection Bureau, an agency with independent leadership and funding, to protect all consumers and particularly our volunteer forces through the Office of Servicemember Affairs. In 2012, Congress amended the Military Lending Act, which was originally passed in 2006 with strong bipartisan support, to address the evolution of predatory lending practices, and the Department of Defense worked closely with the CFPB to implement stronger rules to enhance military readiness and protect the families that also dedicate themselves to military service. The CFPB was also given the authority to supervise lender compliance with the Military Lending Act.
The existence of the CFPB allows the Department of Defense and servicemembers to focus on their mission, which in turn improves military readiness. CFPB enforcement and supervision makes it less likely that men and women on active duty are distracted by debt collectors, payday lenders, or problems with their mortgage servicers. The CFPB conducts important outreach to servicemembers, and has tracked and responded to over 70,000 complaints from servicemembers, veterans, and their dependents. It has conducted 148 visits to military installations to talk about financial readiness and give direct support to servicemembers while also providing Judge Advocate General legal assistance attorneys with up-to-date information on federal laws and policies.
Through both education and enforcement, the CFPB has worked to ensure servicemembers can focus on their families and their duties. As we continue our work for servicemembers and veterans, we urge our colleagues to consider the benefits the CFPB has provided. Attacking the funding, structure, or independence of the CFPB only makes its work on behalf of our troops harder.
If Congress really wants to provide our servicemembers and their families with the best resources, then we should continue to support an independent and strong CFPB. We should further empower the CFPB to fight for our servicemembers and their families, while they fight to protect and defend us.
Military readiness begins with individual readiness, which in turn depends on family readiness. When military families struggle at the hands of predatory and unscrupulous lenders targeting them precisely because of the military status, military readiness is reduced, and the risks to the lives of our servicemembers is increased. Military communities look to us to support the strongest possible advocate for servicemembers, veterans, and their families, and the CFPB has performed admirably. We look forward to working with you on this important matter, and we thank you for your consideration.
Committee on Banking, Housing and Urban Affairs
Committee on Armed Services