(Washington, D.C.) –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 20220
Dear
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
Chairman
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