Charlie Fisher
State Director, OSPIRG
State Director, OSPIRG
OSPIRG
Portland, OR – Debt collection abuses were the leading source (32%) of 44,000 servicemember complaints to the Consumer Financial Protection Bureau, according to a new report. Further, legislation passed by the U.S. House earlier this month intended to cripple the CFPB would place servicemembers, veterans and their families in “financial harm’s way,” thereby threatening unit preparedness.
The bill, HR 10, the so-called Financial Choice Act, but more aptly called the “Wrong Choice Act,” rolls back the powers, funding and independence of the CFPB and it also weakens its pioneering Office of Servicemember Affairs. The bill also eliminates many other financial system reforms of the 2010 Dodd-Frank Act enacted after the second-worst financial crisis in the nation’s history.
“The CFPB has already taken at least 12 major enforcement actions against financial firms targeting young servicemembers, older veterans and their families,” said Charlie Fisher, OSPIRG’s Director. “Gutting the CFPB puts those who protect us in financial harm’s way. That also threatens unit preparedness and mission capabilities because delinquent debt and bad credit reports are a leading cause of revoked security clearances.”
“The CFPB strengthens and protects servicemembers, veterans and their families,” said Joyce Wessel Raezer, Executive Director of the National Military Family Association, “Through enforcement and its ability to provide restitution for servicemembers who have been wronged, the CFPB creates a fairer, more functional financial system they and all consumers can navigate with confidence,”
Among the key findings of the OSPIRG Foundation/Frontier Group report “Protecting Those Who Serve: How the CFPB Safeguards Military Members and Veterans from Abuse in the Financial Marketplace” are the following:
“Predatory lenders cluster their storefronts around military bases, putting their operations in the path of servicemembers and their families,” said Gideon Weissman of Frontier Group, a report co-author. “Not surprisingly, complaints to the CFPB cluster around the bases as well.”
The report also includes excerpts from servicemember complaint narratives. Since the database began accepting these optional narrative stories, about half of complaints include them:
One consumer complaint, submitted from eastern Oregon, in December 2016, stated that Freedom Mortgage had “error after error on closing disclosures, double charging prepays and escrow amounts.” The complaint continues that the company would “promis[e] time and time again that they would take care of it then not respond.” After “push[ing] out the closing date time and time again,” the complainant concludes that they believe, “It’s a tactic … Confuse consumer with the documents and the figures” and “in the mean time make (sic) the numbers are so ambiguous that it appears that the customer is saving money. It is all smoke and mirrors with Freedom Mortgage.”
In conclusion, Fisher noted that “The so-called Financial Choice Act is the wrong choice for military families and all consumers because it takes away the CFPB’s tools to protect us, allowing financial predators to run amok.”