Washington, D.C. – This month, Holly Petraeus concluded her appointment as the founding leader of the Consumer Financial Protection Bureau’s Office of Servicemember Affairs. The consumer agency’s military protection unit has worked to secure $120 million in refunds for military families with mortgages, credit cards, student loans, and other financial products. The agency has also handled more than 70,000 complaints from military families and visited 145 military installations and units.
CFPB Director Richard Cordray tasked Petraeus, a nationally-recognized expert on financial issues faced by military families, with launching an office charged with coordinating consumer protection efforts across the government, monitoring complaints, and launching financial education initiatives. A longtime military family advocate, Petraeus is also the daughter, sister, wife, and mother to members of the military.
“For every American who is active-duty, a veteran, Guard, or Reserve, Holly Petraeus always had your back,” said Rohit Chopra, a CFA Senior Fellow who served alongside Petraeus as an Assistant Director of the CFPB. “Petraeus leaves a legacy that will ensure the consumer agency will maintain its sharp focus on safeguarding the financial lives of military families for years to come.”
Each year, thousands of servicemembers must end their military service because they experience financial distress that leads to the revocation of their security clearances, leading to significant taxpayer costs. In 2006, the Department of Defense submitted a report to Congress that raised concerns about the impact of predatory lending on servicemembers and their families. The Pentagon report noted that “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all volunteer fighting force.” The establishment of the CFPB’s Office of Servicemember Affairs has been a potent weapon to address these readiness, morale, and fiscal concerns.
Under Cordray and Petraeus, the agency’s military protection unit has garnered scores of victories that have helped:
- Men and Women in Uniform Ordered to Move: In light of the illegal foreclosures initiated by mortgage services against military families, Petraeus worked overtime for military homeowners. Each year, approximately one-third of active-duty servicemembers receive Permanent Change of Station orders. For families who own homes and are “underwater,” this can pose severe hardship. The consumer agency worked to institute new guidelines to allow families to sell their homes in a short sale, even if they owe more on their mortgage than their home is worth.
- Servicemembers Burdened with Student Debt: Petraeus and Chopra co-authored a ground-breaking report that uncovered systematic mistreatment of active-duty servicemembers student loan borrowers. The Attorney General of the United States credited Petraeus when announcing a $60 million settlement with Sallie Mae and Navient for its years-long scam to overcharge military families on student loans that the Justice Department described as “intentional, willful, and taken in disregard for the rights of servicemembers.” 78,000 servicemembers received refunds as part of this action.
- Military Families Targeted by Unscrupulous Lenders: Petraeus was a vocal advocate for closing loopholes in the Military Lending Act that allowed financial predators to skirt the law. Cordray and Petraeus worked with Secretary of Defense Ashton Carter and Pentagon officials on new guidelines to close these loopholes. CFA has published research and advocated for stronger protections under the Military Lending Act.
The consumer agency and its military unit also launched financial education programs to assist servicemembers and veterans, led efforts to fine and order US Bank to refund 50,000 servicemembers for its deceptive auto loan scheme, and spoke out against aggressive practices by for-profit colleges.
“Petraeus and her team listened and learned from thousands of men and women in uniform – in person and online – arming them with information to protect their financial futures,” said Michael Best, Senior Policy Advocate at CFA.
Petraeus is succeeded by Paul Kantwill. Kantwill was previously the Department of Defense’s legal policy expert on the financial industry and the effects financial products and services had on military members and their families. Kantwill led an interagency team to close loopholes in the Military Lending Act’s rules. Kantwill had a 25-year military career as an active duty officer in the U.S. Army Judge Advocate General’s Corps, and served in Afghanistan and the Persian Gulf.
For more information about the Consumer Financial Protection Bureau’s Office of Servicemember Affairs, visit http://www.consumerfinance.gov/servicemembers/.
Contact: Michael Best, 202-939-1009
The Consumer Federation of America is an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.