By: Jesibell Espejo, CWOA Intern
The article discusses a recent hearing in the Committee on Banking, Housing, and Urban Affairs focusing on financial protection measures for service members, veterans, and their families, including proposed legislative changes to improve housing loans for Native American veterans, with an emphasis on the role of the Consumer Financial Protection Bureau (CFPB) in addressing financial challenges faced by military personnel and the need for increased financial literacy education.
United States Senate Banking, Housing, and Urban Affairs Committee
Hearings to examine financial protection for service members, veterans, and their families, including S.185, to amend title 38, United States Code, to improve the program for direct housing loans made to Native American Veterans.
This past week, the Committee on Banking, Housing, and Urban Affairs held a hearing on Ensuring Financial Protections for Service Members, Veterans, and their Families. The focus of this hearing was the role of the Consumer Financial Protection Bureau (CFPB) in collaboration with the U.S. Government to assist current service members, veterans, and their families facing financial difficulties.
With the ongoing increase in inflation rates and rising costs of housing, child care, and medical bills, many service members and veterans find themselves in financial distress. This is a matter of significant concern for all branches of the military. As Chairman of the committee, Senator Brown emphasized, "80% of security clearance revocations are due to financial difficulties." In response to this challenge, several bills, including the Fair Debt Collection Services Act, have been introduced and passed to provide financial relief to military families.
In a 2006 report, the Department of Defense revealed that various loan vendors across the U.S. were charging young service members exorbitant interest rates, some as high as 100%. In response to such predatory practices, the CFPB has assisted tens of thousands of service members seeking help and has facilitated the filing of complaints. The CFPB reported that the most common complaint among service members was related to credit reports, specifically inaccuracies resulting from medical debt. Chairman Senator Brown called for the removal of medical debt from the credit reports of service members, noting that the CFPB had already begun this process for service members and veterans.
Another significant concern for service members, veterans, and their families is identity theft. Frequent relocations due to military service make them vulnerable targets for scammers. In fact, service members and veterans report more cases of identity theft in the U.S. than any other group.
To address these issues, the CFPB and the committee called for increased financial literacy education for service members to empower them to make informed financial decisions, particularly as they transition to civilian life. Senator Rounds outlined four goals for enhancing financial literacy education for service members and veterans:
1. Equip young service members and their families with the guidance and tools necessary for long-term financial success.
2. Ensure that individuals leaving military service carry their financial literacy knowledge with them as they transition to civilian life.
3. Promote collaboration among government programs designed to assist service members and veterans to ensure they work cohesively.
4. Enact tailored legislation to deter bad actors while connecting service members and veterans with reputable resources.
During the hearing, three witnesses testified: Cory Titus from the Military Officers' Association of America (MOAA), Andia Dinesen from the Military Banks of America, and Keelly Hruska from the National Military Family Association. They further discussed the issue of financial difficulties among service members and veterans and highlighted the importance of the CFPB's continued operation and protection from unconstitutional challenges.
The views expressed in the articles in this publication are solely those of the authors. They do not necessarily reflect the opinions of the organizations for which they work, CWOAUSCG, the U.S. Coast Guard, the Department of Defense, the Department of Homeland Security, or the U.S. government.