SANTA FE, N.M. – The Financial CHOICE Act is being debated in the House of Representatives this week, aiming to ease restrictions on the financial industry put in place through the Dodd-Frank Act in 2010. However, new research warns that the deregulation would hurt U.S. service members.
According to the report, Protecting Those Who Serve, the bill weakens the Consumer Financial Protection Bureau. Report co-author Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, said that in turn weakens the Office of Servicemember Affairs’ ability to defend military families against predatory financial practices.
“The Financial CHOICE Act makes it almost impossible for the CFPB to protect anyone,” Mierzwinski said, “and that includes service members.”
Its supporters have said the bill, House Resolution 10, would remove blocks on economic growth. Mierzwinski argued that, by making the CFPB “optional,” it risks turning common issues such as 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 is pursuit by debt collectors. For military members, he said, this has job-related consequences.
“Admirals and generals have routinely and often said that a leading cause of losing security clearance is a bad debt or a wrong debt,” he said.
Loss of security clearance limits a service member to lower-level positions, hindering his or her ability to earn more money.
The Financial CHOICE Act is expected to pass the House along party lines, but might not survive in the Senate, where lawmakers on the Banking Committee have shown interest in a smaller but similar bill.daily newsletter to get more of our best original news.