Murray calls on newly appointed head of the Office of Servicemember Affairs to lay out steps financial institutions are taking to ensure that servicemembers are not being taken advantage of while serving our country
Washington, D.C. – February 9, 2011 – (RealEstateRama) — Yesterday, U.S. Senator Patty Murray (D-WA), Chairman of the U.S. Senate Committee on Veterans’ Affairs, sent a letter to Holly Petraeus, head of the Office of Servicemember Affairs in the Consumer Financial Protection Bureau at the U.S. Treasury Department, in response to concerns that some financial institutions were not offering protections to servicemembers provided under the Servicemembers Civil Relief Act. Among the safeguards in the SCRA, which is under the jurisdiction of the Senate Committee on Veterans’ Affairs, are a number intended to ease concerns over financial situations at home for servicemembers. Recently, however, it has come to light that some servicemembers have been improperly overcharged on their mortgages or even been foreclosed upon by lenders.
“I am concerned that numerous military members were improperly overcharged or foreclosed upon while deployed because lenders failed to follow the requirements of SCRA; this is unacceptable,” Senator Murray wrote. “I would like your assessment of how well financial institutions are following SCRA, and what additional steps need to be taken to ensure compliance.”
The full text of the letter is below:
February 8, 2011
Holly Petraeus, Team Lead
Office of Servicemember Affairs
Consumer Financial Protection Bureau Implementation Team
U.S. Department of the Treasury
Washington, DC 20220Dear Mrs. Petraeus:
Congratulations on your nomination to head the Office of Servicemember Affairs at the Consumer Financial Protection Bureau. The Bureau will provide consumers, including servicemembers and their families, with the information they need to make better informed financial choices. It will also promote a fair and transparent process for obtaining services like mortgages and credit cards, while enforcing consistency between the providers of these services. Your role in protecting the rights of our servicemembers is especially important as military families, including the Reserves, are experiencing more frequent deployments.
One of the strongest tools to protect servicemembers is the Servicemembers Civil Relief Act (SCRA). SCRA’s protections, such as the six percent cap on mortgage interest and foreclosure protections, enable our deployed military to stay focused on the mission instead of worrying about their financial situation at home.
I am concerned that numerous military members were improperly overcharged or foreclosed upon while deployed because lenders failed to follow the requirements of SCRA; this is unacceptable. I appreciate the action you took on February 1, 2011, to notify 25 mortgage lenders of their responsibilities under SCRA. This is an important step in making sure these lenders are following the law.
In response to the concerns raised about compliance with SCRA, some companies have already self-identified non-compliance in their home loan business and are working to make corrections. However, I am concerned there may be other lenders that have overcharged or foreclosed upon SCRA-protected servicemembers. It is critical that all lenders provide their employees adequate training and put systems in place to ensure compliance with SCRA.
As you know, SCRA applies to a variety of financial instruments, including consumer loans and credit card debt. It has come to my attention that some companies have identified non-compliance in other service sectors, such as student loans. Companies providing lending services should review their files in order to identify potential violations and move quickly to resolve any they find. As you continue your work on behalf of servicemembers, I hope the scope of your review of financial institutions’ practices includes all of the protections covered by SCRA.
Based on your work to date, I would like your assessment of how well financial institutions are following SCRA, and what additional steps need to be taken to ensure compliance.
Thank you again for your work on behalf of servicemembers and veterans. I look forward to hearing from you and to working together in the future.
Sincerely, Patty Murray