Money problems have long plagued America’s military families. Military members are more likely to be victims of financial predators, especially when it comes to mortgage debt. They already sacrifice so much for their country, yet servicemembers cite finances as the second major source of stress, just behind career-related stress. For anyone who has served, or has a loved one who has served, this comes as no surprise. But now, military families have another tool to fight back against financial predators and the stress created by financial woes.
The federal government recently created a body to protect and provide for servicemembers. Called the Office of Servicemembers Affairs, the federal agency’s goal is to provide military families with resources and services needed to tackle financial hardships. Part of the Consumer Financial Protection Bureau, a Congress-created independent watchdog entity, the OSA has aims on improving communication between federal and state agencies.
Holly Petraeus, wife of four-star Gen. David Petraeus, heads the OSA. Already, Holly held roundtable meetings with financial experts and military leaders to discuss a program that would educate servicemembers about and protect them from financial predators. In general, the OSA will work with the Department of Defense to create said program, answer questions and respond to complaints.
Earlier this year, Holly Petraeus called on mortgage banks to act according to the Servicemember Civil Relief Act (SCRA), which protected servicemembers from wrongful foreclosures, interest rate increases and evictions. Twenty-five of the largest mortgage banks received a letter from the OSA that CEOs comply with the SCRA.
Since military families often move, it is difficult for them to attain financial stability. Frequent relocations make it a challenge to establish credit and save money. Consequently, military families are more prone to fall prey to unscrupulous companies that are willing to take advantage of them. The fiscal challenges facing servicemembers and their families are made clear in a FINRA Investor Education Foundation survey.
The survey found that:
-More than a third of respondents had trouble making monthly payments and bills
-Almost a third of non-commissioned officers and enlisted servicemembers had used questionable borrowing practices, such as payday loans or auto-title loans, in the last five years
-Half of respondents had savings for expected life events, such as retirement or a child’s college eduation
Financial stresses can often overflow into other areas of a servicemember’s life, affecting their performance while serving and impede their ability to prepare for active duty. But these people who have given up so much for their country deserve better, and the OSA has plans to give them a voice at the Consumer Financial Protection Bureau. The OSA will demand the Bureau’s bank and non-bank examiners to be on the lookout for consumer financial protection violations targeted towards the military. The OSA will help the Bureau enforce those violations, and serve as a conduit between families and the Bureau to facilitate the efficient handling of questions and complaints about financial products and services fraud. Finally, the OSA will work with DOD to give military personnel solid financial education so that they can avoid problematic or predatory deals.
Most reputable companies who work with veterans will be accredited by the Better Business Bureau. These companies, like national lender VA Mortgage Center or financial services provider USAA, will also offer a reviews and complaints page that allows consumers to get feedback from other military consumer’s experiences with the same company. Before entering into a financial transaction of any kind, active duty personnel and veterans should do thorough research. As the old saying goes, proper preparation prevents poor performance!