USA — Officials Seek Input on New Consumer Protection Office

WASHINGTON, April 13, 2011 — Trea­sury Depart­ment offi­cials met here today with ser­vice mem­bers and their fam­i­lies to bet­ter under­stand finan­cial chal­lenges in the mil­i­tary com­mu­ni­ty.
Hol­ly Petraeus, head of the Office of Ser­vice­mem­ber Affairs in the Trea­sury Department’s Con­sumer Finan­cial Pro­tec­tion Bureau, has been trav­el­ing to mil­i­tary posts through­out the coun­try and lead­ing dia­logues with troops and their fam­i­lies since Jan­u­ary.

Petraeus and Eliz­a­beth War­ren, the trea­sury secretary’s spe­cial advi­sor for the Con­sumer Finan­cial Pro­tec­tion Bureau, are gath­er­ing feed­back they hope will help them when the new offices offi­cial­ly stand up July 21. 

“A sig­nif­i­cant part of what we’re here to do is be a voice for mil­i­tary fam­i­lies and bet­ter under­stand the finan­cial issues fac­ing mil­i­tary per­son­nel,” War­ren said to an audi­ence of about 70 troops and spous­es. She added that she and Petraeus want “to make sure that mil­i­tary fam­i­lies have ade­quate access to finan­cial edu­ca­tion, and that there are ade­quate rules to pro­tect mil­i­tary families.” 

For the first time, War­ren explained, the Con­sumer Finan­cial Pro­tec­tion Bureau will have juris­dic­tion over lenders out­side the tra­di­tion­al bank­ing sys­tem, such as mort­gage bro­kers, title loan­ers and check cash­ers, all of which have preyed on mil­i­tary com­mu­ni­ties, she said. 

The bureau can enforce bet­ter prac­tices and finan­cial laws on those groups that they pre­vi­ous­ly could not, she added, cit­ing the impor­tance of mil­i­tary fam­i­lies’ input when deal­ing with such vendors. 

“We want to ensure that your per­spec­tive is in the DNA of this agency right from the begin­ning,” War­ren said. “If we do this right, we have an oppor­tu­ni­ty with this agency to make some real changes.” 

Petraeus echoed Warren’s sen­ti­ments, express­ing hap­pi­ness at being asked to head an office ded­i­cat­ed to address­ing finan­cial con­cerns of ser­vice mem­bers, as well as hear­ing and respond­ing to their com­plaints. Her office, she said, will ensure mil­i­tary fam­i­lies have the finan­cial edu­ca­tion they need to make good finan­cial deci­sions. “I pledge to do every­thing that I can to be sure that my office serves you,” she told the group today. 

Petraeus has been a mil­i­tary spouse for 36 years. Her hus­band, Army Gen. David H. Petraeus, com­mands U.S. and NATO forces in Afghanistan. She under­stands the kinds of finan­cial chal­lenges mil­i­tary fam­i­lies deal with, she said. 

“It may be hard to believe now, but my hus­band and I were once a young Army cou­ple who did­n’t make a whole lot of mon­ey,” she said. “And we weren’t that smart about what we did with it. We made some of the rook­ie finan­cial mis­takes I try to warn peo­ple about today.” 

For exam­ple, she said, they had to have the hot sports car, and they bought fur­ni­ture at rent-to-own stores. They also once signed an apart­ment rental con­tract with­out phys­i­cal­ly check­ing out the place, because the pic­ture in the brochure looked nice, she added. 

“I think the lack of cred­it cards and easy loans in those days pro­tect­ed us from get­ting into too much trou­ble,” Petraeus said. “Unfor­tu­nate­ly, that’s not the case for mil­i­tary fam­i­lies today.” 

Peo­ple seek­ing a loan, a cred­it card or even debt relief today will find many expen­sive or out­right fraud­u­lent deals wait­ing for them, espe­cial­ly on the Inter­net, she added. Because ser­vice­mem­bers have a guar­an­teed pay­check each month, troops and their fam­i­lies are attrac­tive tar­gets for scam­mers, Petraeus said, and the military’s cul­ture ensures troops pay their debts. 

“That makes you a pop­u­la­tion at risk”, she said. Prop­er­ly man­ag­ing finances may be dif­fi­cult for younger ser­vice mem­bers and deployed troops, Petraeus said. Because preda­to­ry lenders see them as means for poten­tial prof­it, she added, her office will help troops know how to spot red flags and will respond should they become tar­gets of preda­to­ry lending. 

“It’s because of these spe­cial risks and the unique sac­ri­fices you make for your coun­try that Con­gress cre­at­ed my office,” she said. “The con­ver­sa­tion we have with you today and with oth­er fam­i­lies in the com­ing months will help us decide how the Office of Ser­vice­mem­ber Affairs should oper­ate and what needs imme­di­ate attention.” 

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs) 

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