Servicemembers

Each May as we celebrate Memorial Day, our nation takes a moment to remember all of the brave men and women who died in service to our country. Memorial Day was first initiated as a day of remembrance for fallen soldiers during the Civil War but today it serves as a day to honor all servicemembers who lost their lives while serving in America’s conflicts.

While for some it’s just a day to barbeque or enjoy time off from work, for many of us Memorial Day is much more. Many people observe the day by visiting Arlington National Cemetery, going to museums, or participating in hometown parades. Some of us also use this day as an opportunity to connect Americans to our military community.

There are so many ways to get involved and make this day special. Checking in with someone who has a personal connection to a soldier involved in ongoing conflict makes a positive difference in that person’s day. Volunteering for the National Memorial Day Parade helps to build community and bring people from all walks of life together. And saying “thank you” to the men or women you see in uniform lets them know their sacrifice is appreciated.

The United States has been involved in significant conflict for over the last ten years, with two million American’s having served our country both stateside and overseas. Before coming to the Bureau, I had the great honor of serving my country in Iraq. As a former Soldier, I always appreciated (and counted) on the kindness and patriotism of my relatives, friends, and neighbors to care for my family while I was away.

I am proud to have served in the U.S. Armed Forces and I am proud to continue serving this country at the CFPB. It is our goal to connect with consumers while living our core values to Serve, Lead and Innovate. Our Office of Servicemember Affairs seeks to educate and engage with the public about consumer finance as it impacts Servicemembers and their families. At www.ConsumerFinance.gov servicemembers and their families can find information on a host of initiatives including ways in which we seek to combat financial scams targeted at military consumers. You can also find innovative tools, including our Financial Aid Comparison Shopper, complete with military benefits calculator, and student loan complaint system equipped to field concerns from servicemembers, veterans, and their families.

We thank the men and women serving our country, and on this special day we remember those who, in Abraham Lincoln’s words, gave “the last full measure of devotion.” We will always be mindful of their great sacrifice as we continue to serve the American consumer and those who wear, or have worn, the uniform for our country.

This post also appears on the Department of the Treasury blog.

Our military families make many sacrifices for our nation, and not just when a servicemember goes into combat. Military families also face challenges when a servicemember receives orders for a Permanent Change of Station (PCS) move to another base, and the family has to decide whether to go along or live apart. Unfortunately, for many military families, this challenge has become more difficult in the wake of the housing market downturn. This is because like other Americans, many military homeowners are currently underwater on their mortgage. Because their home’s value has decreased since they purchased it, these servicemembers may not be able to sell their home at a price that will pay off their mortgage, and they may not be able to rent out their home at a price that will cover their monthly mortgage payments. These military homeowners also may get a lower housing allowance at their new duty station, and may face additional loss of income while their spouse looks for a new job. Suddenly, military homeowners who have been faithfully paying their mortgage on time face a real risk of falling behind.

In the last few weeks, Treasury and the Office of Servicemember Affairs at the CFPB have worked together to address this issue. And, as a result, Treasury is making important changes to its Home Affordable Modification Program (HAMP) that will provide more opportunities for mortgage assistance to military homeowners.

Many underwater military homeowners have looked for help from mortgage assistance programs to no avail. If they move, they may be told that they are not eligible to modify the mortgage on their home because it’s no longer their primary residence. And they may not qualify for assistance because they are still current on their mortgage or their income has not changed, so they are not considered to have a “verifiable financial hardship,” despite the fact that they now have to pay for housing in two locations. The financial difficulties are stressful enough, but for military homeowners, becoming delinquent on their mortgage can also put their security clearance at risk. If they show a negative change to their credit rating, it not only hurts their ability to get credit, but can actually cause them to lose the security clearance they must have to do their job.

Under recently announced changes to HAMP, which will go into effect June 1, military homeowners and other families who are permanently displaced by a job-related move may still qualify as owner-occupants, which means they may still qualify for a HAMP mortgage modification. The new criteria states that a borrower may qualify if he or she:

• Is displaced due to an out-of-area job transfer such as PCS orders and was occupying the home as a principal residence immediately prior to the displacement;
• Intends to return to the home at some point in the future; and
• Does not own any other single-family real estate.

Military and other families who do own other residential properties may still qualify for a HAMP modification under expanded opportunities available for rental properties announced by Treasury in January. They also may qualify for a short sale through Treasury’s Home Affordable Foreclosure Alternatives Program (HAFA).

Our servicemembers deserve our full support. We don’t want any member of our military to be forced by financial challenges to leave their family behind. This would be a heartbreaking decision for any family, but it’s especially tough for military families, who often face long periods of separation during deployment. These changes to HAMP are one way Treasury and the CFPB are working together to support military families and the many other hardworking families struggling to maintain homeownership.

Tim Massad is the Assistant Secretary for Financial Stability at the U.S. Department of the Treasury and Holly Petraeus is the Assistant Director for Servicemember Affairs at the Consumer Financial Protection Bureau.

Tomorrow, April 27th, I will join the President and First Lady at Fort Stewart, Georgia, where he will sign an Executive Order directing the Departments of Education, Defense, and Veterans Affairs, in consultation with the Consumer Financial Protection Bureau (CFPB), to take steps to ensure that servicemembers, veterans and their families can get the information they need about the schools where they spend their education benefits. His directive also strengthens oversight and accountability of the schools that offer educational programs to the military.

I applaud this effort to see that servicemembers, veterans, and their families get the most “bang for their buck” when they use their educational benefits. During the past year I’ve traveled to military installations in 15 states and spoken to active-duty, National Guard, and Reserve military members and their families. I’ve also met with veterans and their families, as well as those who advocate for them. One issue that has come up repeatedly in my conversations with them is the challenge of making an informed decision on where to use GI Bill and Military Tuition Assistance benefits. How do they find a quality school that will charge them a fair price, provide adequate support, and set them up for success after graduation without a mountain of student loan debt holding them back?

Too often the schools being selected are for-profit institutions more notable for their slick marketing than for their academic credentials and sound value, much less the gainful employment history of their graduates. Here are just a few stories I’ve heard on my travels:

• An active-duty military spouse at Fort Campbell, Kentucky, was under the impression she was attending a “military-affiliated college” (she wasn’t; it was a for-profit school with no official military status). After she filled out an interest form she was called 10-15 times a day until she enrolled. When she had trouble logging on to her online class, she couldn’t get anyone from the college to help her. She failed the class due to lack of access but was charged the full fee.
• National Guard education officers in Ohio and North Carolina told me they are besieged by for-profit colleges desiring access to the troops. They noted that if they hold a job fair, over half the tables may be for-profit colleges, and that servicemembers may see a school’s presence at a job fair as an implied promise that you will get a job if you graduate from that school.
• A veteran at a forum I attended in Chicago, Illinois, had used up her benefits and incurred $100,000 in student loan debt for Bachelor’s and Master’s degrees from a for-profit college, but was unable to find an employer who was interested in her degrees. She was still working at the same job she had before she went to college.

The CFPB has been working on military education issues. This month at ConsumerFinance.gov we began testing a new online tool, the Financial Aid Comparison Shopper, which includes a military benefits calculator, to help people compare options at different colleges, as well as see graduation and retention rates. We have set up a student loan complaint system, and my office reviews all complaints from servicemembers, veterans, and their families. And we’ve been coordinating with the Federal Trade Commission and the Departments of Justice, Education, Veterans Affairs, and Defense on military education issues.

It’s in everyone’s interest to see that military education dollars are well-spent. If they are, they will provide our country with educated veterans and family members who, like the World War II generation before them, can become the engine that drives our economy forward.

Holly Petraeus leads the Office of Servicemember Affairs at the Consumer Financial Protection Bureau. Last year, she wrote about the incentives that lead for-profit colleges to see servicemembers as “nothing more than dollar signs in uniforms.”

Learn more about the Know Before You Owe project for student loans.

One of the biggest challenges of working at a new organization is getting the word out about what you do and how your product or service makes a difference to the customer. And that’s definitely the case here at the Consumer Financial Protection Bureau and its Office of Servicemember Affairs.

To get the word out since we started up last year, my staff and I have: visited more than two dozen military instillations across the country; met with various members of Congress and testified at hearings; developed working relationships with crucial Department of Defense offices; established a social media presence; and hosted a Financial Fitness Forum for the military and banking industry leaders.

We took another big step forward recently when the Bureau hosted our first Town Hall with Veterans Service Organizations (VSOs), and Military Service Organizations (MSOs).

Since the earliest days of the United States military, there have been groups of veterans, community leaders, and concerned citizens who’ve banded together to address issues affecting the lives of American servicemembers. For more than a century, many of the leading VSOs and MSOs have been among the most effective champions for servicemembers, veterans, and their families.

For our town hall we hosted 26 representatives from such organizations as the Military Officers Association of America (MOAA), the Veterans of Foreign Wars (VFW), Iraq and Afghanistan Veterans of America (IAVA), the National Military Family Association (NMFA), and others as we talked about how the Bureau works to protect servicemembers, veterans, and military families.

The town hall provided the VSO and MSO representatives an opportunity to ask questions and speak directly to our Bureau’s senior officials about military consumer finance issues.

We got some great questions on topics ranging from for-profit colleges to contract arbitration clauses. We also described what the Bureau is doing to protect servicemembers, highlighted some resources we have to assist military families, and conveyed that we have shared goals and priorities when it comes to protecting the financial future of America’s military community.

Director Richard Cordray told the audience how seriously he takes the job of being a consumer watchdog for military families:

“Active-duty servicemembers, National Guard and Reserve personnel, military spouses, retirees, veterans and their families often face unique financial challenges that can leave them vulnerable to debt, scams, questionable business practices and a wide range of consumer financial protection issues,” he said. “As the Director of our nation’s consumer watchdog, I am honored to have the opportunity to protect the men and women who have sacrificed so greatly for this country.”

What he said really sums up the mission of my office. Everything we do is dedicated to helping servicemembers, veterans and military families build strong financial foundations and receive the consumer financial protections they deserve.

We’ve found allies in the VSOs and MSOs, and we look forward to working together as we pursue our shared mission of helping military families.

When I was at Fort Drum, NY last week I heard from a military spouse who said her family has been separated for 4 years – partly because of deployments but also because they can’t sell their house. At the same meeting an officer told me that he is underwater on a home he bought at a previous assignment. He wondered if there were any options for him that wouldn’t ruin his credit or require a large sum of money he didn’t have. (more…)

Today, we proudly announced a joint effort with state Attorneys General and the Department of Defense to combat scams directed at servicemembers, veterans, and their families. Recognizing that this population is often targeted by financial scams, we created the Repeat Offenders Against Military Database (ROAM) to track companies and individuals who repeatedly target the military community. (more…)