Durbin and Duckworth Call for Stronger Consumer Protections for Military Families
[WASHINGTON, DC] – U.S. Senator Dick Durbin (D-IL) and U.S. Representative Tammy Duckworth (D-IL) spoke at a press conference today to call for additional tools to better protect members of the military and their families from abusive financial practices. Today, Duckworth introduced legislation in the House of Representatives that would empower the Consumer Financial Protection Bureau (CFPB) to oversee and enforce compliance with certain existing provisions of the Service Member Civil Relief Act (SCRA). The SCRA was designed to ease financial burdens on service members during periods of military service, but despite these protections, enforcement of this critical law has been found to be inconsistent and subject to the discretion of financial regulators. Durbin has co-sponsored similar legislation in the Senate.
“I get exercised over the exploitation of consumers. Period. But I get especially exercised when these consumers are veterans and members of the active military,” Durbin said. “Go to a military base and take a look at what’s sitting outside: predatory lenders, payday loans, and other people who are trying to take advantage of military families. In many ways, they are not only endangering these families and their economic future, they are threatening the stability of our military. What we’re doing here today is adding new enforcement to a law that has been on the books for a long time to protect members of the military from the exploitation that’s taking place.”
“As someone who was deployed to a combat zone, I know how stressful that experience can be,” Duckworth said. “You’re trying to do your job and serve your nation under the most difficult of circumstances, and at the same time, you’re worried about the family you’ve left behind. I can only imagine the stress servicemembers are under when they also face financial difficulties during their service. That’s why the Military Consumer Protection Act is so important.”
Video of Duckworth and Durbin’s remarks at today’s press conference is available here.
Audio of Duckworth and Durbin’s remarks at today’s press conference is available here.
The Military Consumer Protection Act was introduced in the Senate by U.S. Senators Jack Reed (D-RI) and Chuck Schumer (D-NY), and is also co-sponsored by U.S. Senators Elizabeth Warren (D-MA), Mark Warner (D-VA), Jeff Merkley (D-OR), Richard Blumenthal (D-CT), Al Franken (D-MN), Tim Kaine (D-VA), Bob Menendez (D-NJ), and Mazie Hirono (D-HI). It is supported by a range of organizations representing the interests of service members and their families, including: the Consumer Federation of America; the National Guard Association of the United States; the National Association of Consumer Advocates; the National Military Family Association; the Military Officers Association of America; and U.S. PIRG.
In June, Durbin and Duckworth introduced the bipartisan Servicemember Student Loan Affordability Act. The legislation would fix a provision in the Servicemembers Civil Relief Act (SCRA) – created in 1940 – that unintentionally discourages members of the military from consolidating or refinancing pre-service student loans. A provision in the SCRA protects servicemembers from high interest rates by capping interest rates at 6 percent on loans that they took out before entering active duty military service. However, if a servicemember consolidates or refinances their student loans that new loan is no longer eligible for this protection, preventing them from taking advantage of both the Public Service Loan Forgiveness program and the interest rate cap.
The Durbin-Duckworth Servicemember Student Loan Affordability Act would allow pre-service private or federal student loan debt to be consolidated or refinanced, while retaining the 6 percent rate cap under SCRA. This enables servicemembers with Federal Family Education Loans or Perkins student loans to enroll in the Public Service Loan Forgiveness program while they are serving and still take advantage of the 6 percent rate cap under SCRA.
With average student loan debt for active-duty servicemembers reaching more than $25,000, this is a widespread issue for military families. This bill has support from the American Legion, Veteran Education Success, NEA, AFT, SEIU, Young Invincible, Center for Responsible Lending, National Consumer Law Center, Consumer Federation of America, Education Trust, Consumers Union, The Institute of College Access and Success, Association of the United States Navy and the National Guard Association of the United States.
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