CFPB Helps Servicemembers with Financial Issues
Written by: Kristy Welsh
Last Updated: August 30, 2017
Every single one of us needs consumer protection relative to personal finance products and services. However, those serving in our military not only have unique consumer rights afforded to them, but are also particularly vulnerable to violations of these rights.
Thus, the Consumer Financial Protection Bureau's creation of the Office of Servicemember Affairs.
As stated on the CFPB website, the Office of Servicemember Affairs exists:
- "To ensure that military personnel and their families have a voice at the Consumer Financial Protection Bureau. Military life can have some extra challenges that can sometimes have powerful financial repercussions."
Here's how the CFPB aims to help.
Responds to Complaints About Financial Products and Services
If you believe your consumer rights are being violated, the CFPB wants to hear about it.
The CFPB accepts complaints on any product or service relative to the financial industry, including debt collection, student loans, payday loans, mortgages, credit cards, credit reporting, auto loans, money transfers, and banking issues.
Of all the categories, complaints by servicemembers are most often relative to debt collection practices.
The CFPB is particularly concerned with debt collectors illegally:
- Contacting a servicemember's military chain of command.
- Threatening punishment under the Uniform Code of Military Justice (which requires servicemembers maintain good finances).
- Threatening to have a servicemember reduced in rank.
- Threatening to have a servicemember's security clearance revoked.
The CFPB is also concerned about servicemember violations of consumer rights relative to:
- Student loans, as servicers frequently provide incorrect information to servicemembers, such as that protections only apply when they are deployed (not true).
- Payday loans, as the CFPB believes lenders routinely skirt the Military Lending Act by lending just outside its narrow parameters (which prohibits interest rates above 36 percent).
- Mortgages, as servicers routinely fail to provide accurate and timely information about available assistance options when a military family gets Permanent Change of Station (PCS) orders.
Once the CFPB receives it, your complaint and any supporting documentation is forwarded on to the company for their review. The company has 15 days to respond to the CFPB and to you.
During this 15-day period, you can expect to receive from the CFPB email updates on your complaint status. You can also check the status online at ConsumerFinance.gov.
Links You to Helpful Financial Resources
- Personal Financial Management Program — Offering servicemembers personalized financial planning assistance.
- Savings Deposit Program — Providing guaranteed 10 percent interest on savings up to $10,000 while deployed.
- Thrift Savings Plan — Retirement savings and investment plan offering an annual expected return of 7 percent.
Paying for Education
- Montgomery GI Bill
- Post 9/11 GI Bill
- Loans and Grants
- Air Force Aid Society
- Army Emergency Relief
- Coast Guard Mutual Assistance
- Navy-Marine Corps Relief Society
- American Red Cross Financial Assistance for Servicemembers
Other Helpful Resources
- General information on military pay
- Tax information
- Legal assistance
The CFPB also provides numerous links to various external resources on strategic money management.
Provides Tips On Protecting Your Finances
Avoiding VA Benefit Scams — If you have yet to sign up for your VA benefits, be leery of anyone offering to help via phone or at your doorstep. They're scammers, as the VA does not participate in telemarketing and rarely makes house calls. What these scammers want is to steal your personal information and, subsequently, your identity, good credit, and money. Sign up for the real deal via the Department of Veteran Affairs.
Avoiding High Credit Card Rates — If you have a credit card balance prior to entering into active duty, your credit card company cannot charge you more than 6 percent on your pre-active duty balance. (Note, the 6 percent cap does not apply to new credit card debt acquired while active.) So let your credit card company know as soon as you enter active duty. If they fail to comply with the 6 percent cap, submit a complaint to the CFPB.
Publishes Free Financial Guides
Find links and details to all of the aforementioned resources at ConsumerFinance.gov.