WASHINGTON, D.C. –Today, U.S. Sens. Jack Reed (D-RI) and Sherrod Brown (D-OH) announced legislation to strengthen consumer protections for servicemembers and their families. Reed and Brown’s bill, the Military Consumer Enforcement Act, would authorize the Consumer Financial Protection Bureau’s (CFPB) Office of Servicemember Affairs to oversee enforcement of financial protections outlined in the Servicemember Civil Relief Act (SCRA).

Congress implemented the SCRA to protect active military members and their families from financial issues ranging from mortgage foreclosure to eviction so they could focus on their active duty responsibilities. However, enforcement of the law has been inconsistent, leading many military members and their families to struggle with predatory financial practices – which hurt servicemembers and undermine military readiness. Reed and Brown’s legislation would enable CFPB’s Office of Servicemember Affairs to independently enforce certain sections of the SCRA and act as a watchdog to protect servicemembers and their families. 

CFPB's Office of Servicemember Affairs has handled more than 70,000 complaints from servicemembers and provided financial education at 148 military facilities nationwide. 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.

“Due to the challenges that our troops and their families face, they deserve a strong consumer watchdog to look out for their best interests and financial well-being.  To support servicemembers and their families, we need a strong and independent Consumer Financial Protection Bureau.  That is why I am introducing this legislation - to further strengthen the CFPB’s ability to protect our servicemembers and their families,” said Reed, a former Army Ranger, a senior member of the Banking Committee, and the Ranking Member of the Armed Services Committee.  “Military readiness goes hand in hand with strong consumer protections.  Our forces on the front lines must be able to focus on the mission at hand without having to worry about financial problems or scams back home.  I helped create the Office of Servicemember Affairs at the CFPB so that military families would have someone to turn to and a place that could assist them with financial questions.  Giving CFPB the authority it needs to enforce existing Servicemembers Civil Relief Act safeguards, such as not overcharging our servicemembers, is a smart, logical step.”

“Instead of weakening protections for the men and women who serve our country, we should be strengthening them –that’s what the Military Consumer Enforcement Act will do,” said Brown. “The CFPB is servicemembers’ cop on the beat, and we need to give it the tools it needs to protect the men and women who have sacrificed so much for our country.”

According to the Military Compensation and Retirement Modernization Commission report, financial problems affect readiness.  The report estimates that 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.”

The Military Consumer Enforcement Act would give CFPB’s Office of Servicemember Affairs jurisdiction over enforcing the SCRA provisions regarding certain financial matters, including:

• Default judgements
• Interest rate on debts incurred before military service
• Evictions
• Installment contracts for purchase or lease
• Mortgages and trust deeds
• Termination of residential or motor vehicle leases
• Termination of telephone service contracts

Reed and Brown were joined on a news conference call by Holly Petraeus, who led CFPB’s Office of Servicemember Affairs from 2011-2016, and Retired Chief Master Sgt. of the Air Force James Cody, who served as the senior enlisted leader of the Air Force from 2013-2017.

“The CFPB, with its focus on the consumer and an office specifically for servicemembers, is ideally suited to oversee and enforce those parts of the SCRA that concern servicemembers’ finances. In 6 years over 29 million Americans have received almost $12 billion in relief thanks to this Bureau that is there to see that they are treated fairly and legally. It would be a shame to see its ability to help curtailed by special interests,” said Petraeus.

“The financial readiness of our servicemembers ties directly to military readiness and the ability to respond as our nation calls upon us. In my more than 32 years of service, and certainly the last four years as the 17^th Chief Master Sergeant of the Air Force, I’ve seen firsthand how financial situations hurt our readiness, careers, and more over have destroyed lives. The CFPB, and specifically OSA, have proven they are willing to take on those that prey on those that serve and have committed to the educational literacy of those that serve. We need them to have the authority and responsibility to champion this effort, and the Military Consumer Enforcement Act will do just that,” said Chief Cody.

Earlier this year, Reed and Brown wrote a letter to Senate colleagues urging 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.