Holly Petraeus addresses consumer protection, financial support to service members in Vicenza, Italy
May 21, 2014
VICENZA, Italy - Consumer Financial Protection Bureau Assistant Director for Service Member Affairs Holly Petraeus visited with troops, senior leaders and spouses in Vicenza May 19, to deliver the message to Soldiers and their Families that they have an advocate in Washington, D.C.
She engaged each of her several audiences with the message that the CFPB supports consumer empowerment and provides education for consumer awareness, two key components of her engagement with military communities across the globe. For Petraeus, visiting Caserma Ederle on Monday was a return to her professional roots, where she began her career as a GS-3 dispatching housing assignments in 1975.
Following the mortgage crisis that cratered in 2008, Petraeus said Congress asked, "Who is looking out for consumers?" and determined that while numerous laws were in place and more than a half dozen federal entities had some part in consumer protection, no single entity made it their first priority. That situation brought about the creation of the Consumer Financial Protection Bureau as a federal agency with the power to oversee companies that provide consumer financial products and services.
Service Member Affairs for the CFPB looks particularly at issues affecting the military and their families, Petraeus said. She has been called to testify before Congress multiple times and reported that bipartisan support for the fair treatment of service members is very strong.
In some cases, CFPB oversight uncovers policies or practices that the CFPB can work with businesses to correct. In other cases, the CFPB can file charges, often resulting in out-of-court settlements that repay plaintiffs and result in changes that protect consumers going forward.
In 2012 CFPB issued a report that certain student loan lenders were not providing clear and accurate information about loan repayment options with respect to the Servicemembers Civil Relief Act (SCRA) cap on interest charged on pre-existing student loans and other consumer credit products, which by statute were not to exceed 6 percent while service members are on active duty, Petraeus said.
The matter was turned over to the U.S. Department of Justice, which announced just the previous week, May 13, an enforcement action against Sallie Mae (Sallie Mae Bank and Navient Solutions), the largest servicer of federal and private student loans, which was found to be systematically violating the legal rights of U.S. service members.
According to a release on the CFPB website, the Federal Deposit Insurance Corporation (FDIC) also reached a settlement with the companies that addresses allegations of student loan servicing misconduct. As a result, Sallie Mae has been ordered to pay $96.6 million in restitution and penalties to affected service members.
CFPB has also brought about numerous returns of funds to customers who were sold unnecessary consumer protection plans or overcharged for mortgage interest.
Petraeus made it clear that she works for Soldiers and families, and welcomes complaints which give voice to individuals when they otherwise have difficulty being heard.
"I encourage you to complain to the CFPB if you haven't been able to get a response," Petraeus said. "Please complain. We want to hear from you."
The CFPB is easy to reach online at http://www.consumerfinance.gov/
When complaints are received they are entered into the CPFB complaint system and assigned a case number. Cases are sent to the company in question, which is given 15 days to respond. Areas where problems most frequently occur include home mortgages, debt collections, credit reports, credit cards, vehicle loans, student loans and payday loans.
While fighting to correct past wrongs is a tremendous help to Soldiers, Petraeus said that providing financial education so people can make better informed decisions is very important.
"We could never have enough lawyers to play Whac-A-Mole with every bad actor with ideas about how to rip you off," she told troops. "That's why financial education is so important."
She warned her audiences against giving in to advance fee scams that require payment for collateral, pre-payment for loans or other arrangements that ask for cash before providing a service or benefit. Petraeus spoke of the benefits of the SCRA and also told Soldiers to exercise caution when seeking to use their Tuition Assistance or GI Bill benefit for a college degree.
"There are some colleges that only see it as a business and aren't really focused on the education you receive," Petraeus said. She recommended making sure that a particular learning institution is regionally accredited and to research other telling factors such as their graduation rate (do students stick with them?), gainful employment rate for graduates (are their graduates being hired?), and student loan default rate (are graduates earning enough to pay back loans?) before making binding commitments.
"After your home, college is the second biggest consumer purchase you will make," Petraeus told Soldiers. "Take time to make a good financial decision. Don't pick based on who has the best marketing."
Addressing consumer education and awareness, Petraeus recommended going to annualcreditreport.com once a year to review one's credit score.
"Take that first step," she said. "If there is a problem, get with some of the great resources the Army provides, make a plan and get working on those problems."
On hand after the presentations to provide additional information were representatives from Banca Nazionale del Lavoro, Community Bank, the Italy Finance Office, Army Emergency Relief, the Education Center, University of Maryland University College, Central Texas College, American Red Cross, Veterans Affairs, Army Career & Alumni Program and the Financial Readiness Program.
Allison Wunsch, Financial Readiness Program manager, said Petraeus' visit was a wonderful opportunity for a small garrison community like Vicenza, where Soldiers might feel forgotten and isolated from some of the great support that government provides.
"It's also great for young Soldiers with their careers ahead of them to hear from such a knowledgeable source," Wunsch said. "These Soldiers move a lot and are exposed to many scams that specifically target the military, so their familiarity with a consumer advocate like the CFPB is extremely important."
Petraeus took questions from the audience and concluded her remarks with a plea for complaints.
"We're in D.C. working for you," she said.