Consumer Groups Warn CHOICE Act Would Hurt Military Families

The Financial CHOICE Act is in the U.S. Senate, and its backers aim to ease restrictions on banks put in place by the Dodd-Frank Act after the 2007 economic crash. But new research warns the deregulation would hurt U.S. service members.

A report, called Protecting Those Who Serve, said the bill weakens the Consumer Financial Protection Bureau. That would include limiting the ability of the Office of Servicemember Affairs to defend military families against common problems with predatory lenders.

Report coauthor Ed Mierzwinski is the consumer program director with the U.S. Public Interest Research Group.

“The Financial CHOICE Act makes it almost impossible for the CFPB to protect anyone,” Mierzwinski said; “and that includes service members.“

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A new report says Congress’ attempt to ease regulations on the financial industry would have harmful side effects for the nation’s military families.

Supporters say the bill, HR 10, removes blocks on economic growth. But Mierzwinski argued that, by making the CFPB optional, the act risks turning common issues like debt collection and high-interest payday loans into bigger problems for military families.

The U.S. PIRG Education Fund and Frontier Group analyzed 44,000 consumer grievances from active duty service members, veterans and their families. Mierzwinski said the most common complaint was problems with debt collectors. He said for military members, this can have career consequences.

“Admirals and Generals have routinely and often said that a leading cause of losing a security clearance is a bad debt, or a wrong debt,” Mierzwinski said.

Loss of security clearance limits a service member to lower level positions, hindering their ability to earn more money.

The Financial CHOICE Act passed the House along party lines, but it is likely to change in the Senate, where lawmakers on the Banking Committee have shown interest in a smaller but similar bill.

~~  Dan Heyman ~~

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