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U.S. Senator Tammy Baldwin Helps Introduce Legislation to Protect Servicemembers and Families from Financial Shams

The Military Consumer Enforcement Act would enhance CFPB’s ability to enforce consumer protections for servicemembers

WASHINGTON, D.C. – In an effort to better protect members of the military and their families from abusive financial practices, U.S. Senator Tammy Baldwin (D-WI) joined Senators Jack Reed (D-RI), Sherrod Brown (D-OH), and several of their colleagues, in introducing the Military Consumer Enforcement Act.  This legislation would empower the Consumer Financial Protection Bureau (CFPB) to oversee and enforce compliance with certain existing provisions of the Servicemember Civil Relief Act (SCRA).

The SCRA was designed to ease financial burdens on servicemembers during periods of military service.  For example, the SCRA includes provisions that prohibit the eviction of covered military members and their dependents from rental or mortgaged property, and the law caps interest at 6% on debts incurred prior to an individual entering active duty military service.

Despite these SCRA protections, which Congress enacted to enable servicemembers to “devote their entire energy to the defense needs of the nation,” enforcement of this critical law has been inconsistent and subject to the discretion of financial regulators.  Without a change in the law, SCRA enforcement will continue to be subject to the changing priorities of financial regulators.  Prioritizing the consumer protection of our servicemembers should not be discretionary.  It should be mandatory, and the Military Consumer Enforcement Act would ensure that SCRA enforcement will be a permanent priority for the CFPB.

“Our servicemen and women and their families face unique challenges and they deserve strong consumer protections,” said Senator Baldwin. “Our Military Consumer Enforcement Act will ensure that the CFPB has the tools it needs to be able to protect the men and women who volunteer to protect our country.”

The Military Consumer Protection Act is also cosponsored by U.S. Senators Jon Tester (D-MT), Richard Blumenthal (D-CT), Tim Kaine (D-VA), Tammy Duckworth (D-IL), Elizabeth Warren (D-MA), Al Franken (D-MN), Amy Klobuchar (D-MN), Chris Van Hollen (D-MD), Catherine Cortez Masto (D-NV) and Bob Menendez (D-NJ).

The bill is also supported by a range of more than 30 organizations representing the interests of servicemembers and their families, including: National Military Family Association, Military Officers Association of America, Veterans Education Success, Student Veterans of America, Consumer Federation of America, Americans for Financial Reform, Public Citizen, the Sargent Shriver National Center on Poverty Law, U.S. PIRG, Consumers Union, National Association of Consumer Advocates, National Consumer Law Center (on behalf of its low income clients), National Community Reinvestment Coalition, Center for Popular Democracy, Alliance for Justice, American Association for Justice, and Center for Responsible Lending.

Specifically, the Military Consumer Enforcement Act would give the CFPB enforcement power over the following SCRA provisions:

  • Section 101. Definitions.
  • Section 106. Extension of rights and protections to reserves ordered to report for military service and to persons ordered to report for induction.
  • Section 107. Waiver of rights pursuant to written agreement, which excludes bailments.
  • Section 108. Exercise of rights under the SCRA not to affect certain future financial transactions, which excludes insurance.
  • Section 201. Protection of Servicemembers against default judgments, which excludes child custody proceedings.
  • Section 207. Maximum rate of interest on debts incurred before military service.
  • Section 301. Evictions and distress.
  • Section 302. Protection under installment contracts for purchase or lease.
  • Section 303. Mortgages and trust deeds.
  • Section 305. Termination of residential or motor vehicle leases.
  • Section 305(A). Termination of telephone service contracts.