Military members and their families sacrifice a great deal to keep America safe.
The strain of service can take a devastating toll on finances. Fiscal predators prey on this demographic, and military members are more likely to be financially overleveraged than their civilian counterparts.
A renewed commitment to protecting military families from financial exploitation has been a long time coming. The newest front in this battle has the potential to turn the tide and boost education and resources for service members nationwide.
Federal and military officials recently unveiled the Office of Servicemember Affairs, a new consumer protection agency focused solely on service members and their families. The OSA is part of the Consumer Financial Protection Bureau, an independent watchdog organization created last year by Congress.
The OSA is working with the Department of Defense to ensure that military members and their families receive consistent and clear financial education and to monitor complains and questions. It's also fostering communication among federal and state agencies to improve consumer protections for military families.
The agency is headed by Holly Petraeus, wife of Gen. David Petraeus, the current commander of U.S. forces in Afghanistan.
"We understand that military life can have some extra challenges, such as deployment and frequent moves, and that those challenges can sometimes have powerful financial repercussions," Holly Petraeus wrote in a welcome letter to military families. "Our men and women in uniform should be able to do their jobs without having to worry about falling victim to unfair or deceptive financial practices."
Being financially overwhelmed can make service members and their spouses more vulnerable to unscrupulous companies seeking to take advantage of them.
A recent survey from the FINRA Investor Education Foundation featured some sobering findings:
- Nearly one in three enlisted personnel or junior NCOs had used payday loans, auto-title loans, or other risky borrowing practices in the previous five years.
- About 15% of those surveyed had both a mortgage and a credit card balance of at least $10,000.
- More than half made only the minimum payment on credit cards, and almost a third of respondents reported a late payment in the past year.
- More than a third had difficulties covering monthly expenses and bills
- Only half were saving for predictable life events such as retirement or a child's college education.
These issues are more than just financial problems. Fiscal concerns on the home front can negatively affect service members in the field and even jeopardize mission readiness.
Finances are consistently ranked as one of the top three stressors for service members, ahead of things such as deployments, family, and even war. Nearly three-quarters of Naval security clearance revocations and denials in 2007 were tied directly to fiscal management issues, according to the CFPB.
"Soldiers who are distracted by financial issues at home are not fully focused on fighting the enemy," Army Secretary John McHugh's wrote last spring.
Holly Petraeus and her colleagues continue to meet with military families, using their input to help shape OSA initiatives. Educating service members and teaching them how to make sound financial decisions is a cornerstone of the agency's mission.
It's also an ethos that professionals in the financial world and civilians across the country should take to heart -- not just on Memorial Day, but every day of the year. Military members and their families have dedicated their lives to serving our country.
We can serve them with openness, education, and a commitment to rooting out those who would dishonor their sacrifice for the sake of an easy dollar.
Guest contributor Chris Birk is director of content and communications for Veterans United Home Loans, the nation's leading dedicated VA lender. The Missouri-based company has worked with more than 500,000 military families since its 2003 inception and serviced more than $1 billion in VA loans in the last year alone.
BRASILIA (Reuters) – French Finance Minister Christine Lagarde pledged to push reforms to give Brazil and other emerging economies more influence at the International Monetary Fund as she kicked off a worldwide tour on Monday to win support for her candidacy to lead the global lender.
The backing of Brazil, Latin America's largest economy and an influential diplomatic power, could help ease discontent among developing countries over the long-standing practice of choosing a European to head the Washington-based IMF.
Brazilian Finance Minister Guido Mantega said Brazil had yet to decide whether to support Lagarde or her only declared rival, Mexican central bank chief Agustin Carstens. But he underscored the need for more reforms to give emerging economies a greater voice in the IMF, something Lagarde was eager to stress she supported.
Lagarde's comments came as Carstens kicked off his own tour to campaign for the job, starting in Spain where he urged IMF members not to elect a European by default.
Brazilian officials said in private before Lagarde's visit that President Dilma Rousseff is inclined to back her candidacy as long as she pledges to continue reforming the IMF. They see Lagarde as having more clout to push reforms than Carstens, who arrives in Brazil on Wednesday.
"If I was elected, I'd make sure that the diversity of members is represented at all levels," Lagarde told reporters at a news conference in Brazil's capital, Brasilia.
She added that the fund "must continue the reform process it began under Dominique Strauss-Kahn," who quit as IMF chief after being charged with the attempted rape of a hotel maid in New York this month.
Lagarde, who is a strong favorite to win the post and who France says has the backing of the G8 group of leading economic powers, also said it was important for the IMF to increase international cooperation to avoid excessive currency swings.
Carstens said France was "spinning" its comments regarding votes from the G8 and criticized the view that Lagarde, as a European, would better understand the region's debt crisis.
"The Europeans are wrong to think only a European can help them out of their crisis," he told Mexican radio in an interview from Madrid.
Lagarde said she did not discuss with Brazilian officials the possibility of her serving a shortened term as IMF chief until the end of 2012, when Strauss-Kahn's tenure would have ended. Lagarde has made clear she is seeking a full five-year term.
Mantega said the crucial qualities for the next IMF head were experience, competence and commitment to reform, and that Brazil would wait for all candidates to present their cases before declaring its support. Lagarde is "certainly a "competent minister," he said.
"Brazil wants the philosophy of reform to be maintained by the new managing director," Mantega said after lunching with Lagarde, who also met central bank chief Alexandre Tombini.
Mexican President Felipe Calderon plans to call Rousseff on Tuesday to ask for Brazil's backing of Carstens' candidacy, a Brazilian government source told Reuters.
The 187-member IMF has approved reforms that will give emerging economies increased voting rights and board seats by the end of 2012. More than 6 percent of voting power at the fund will shift to developing countries such as China, which will become the third-biggest member nation.
Lagarde's visit to Brasilia is the first in a hastily arranged global tour that will also take her to India, China, Russia and Saudi Arabia. The IMF has a June 30 deadline to pick a successor. Carstens will visit Portugal on Tuesday.
The resignation of Strauss-Kahn has led to calls from developing countries to end the traditional European lock on the job.
EU nations are strongly backing Lagarde, arguing that a European leader is crucial at a time when the IMF is working with the euro zone to avert the risk of Greece defaulting on its loans and sparking wider financial fallout.
But some emerging economies have objected to another European IMF head, saying it is time to give other nations a turn to reflect a shift in global economic power to developing giants such as India and China.
South African Finance Minister Pravin Gordhan criticized the rich nation support for Lagarde, saying it breached a decision by the G20 group of leading economies for a more open selection process.
Mantega reiterated Brazil's stance that the next IMF leader should be chosen on merit rather than nationality, and that the growing influence of emerging economies should be recognized in the process.
Lagarde's main obstacle is the possibility of an inquiry into her role in a 2008 legal settlement involving paying 285 million euros ($408 million) to businessman Bernard Tapie, an ally of French President Nicolas Sarkozy.
Neither IMF candidate is expected to meet with Rousseff, who has maintained a lower profile than her outspoken predecessor Luiz Inacio Lula da Silva.
(Additional reporting by Sergio Queiroz and Jeferson Ribeiro; further reporting by Jason Lange in Mexico City; Editing by Stuart Grudgings, Philip Barbara and Bill Trott)
NEW YORK (Reuters) – Sen. Charles Schumer on Monday called for legislation that would prohibit the rental of cars that had been recalled for safety reasons.
Schumer said car rental customers would be endangered if rental agencies were granted a request to decide whether a safety recall warranted taking a vehicle out of service.
The American Car Rental Association (ACRA), which represents nearly 100 agencies, in April proposed a system that would allow agencies to decide the seriousness of auto recall issues, and whether or not to take a vehicle out of their fleets.
"Under the proposal ... we sadly could see more tragedies," Schumer said in a statement, citing a case of two California sisters who died while driving a rented vehicle under recall.
Schumer said legislation he introduced in March would require car rental companies to operate under the same restrictions as automobile dealerships, which are banned from selling any recalled vehicle until the relevant safety issue is addressed. He called that a "common sense proposition."
Schumer said the association's proposal would "create a vague double standard that defines some recalled cars as safe and others as dangerous," allowing "these companies to shirk their responsibility to consumers' safety."
Schumer said ACRA's proposal would allow each rental car company to set its own policy, which would lead to unsafe cars being rented out.
A National Highway Traffic Safety Administration audit last year of ten recalls on Chrysler and GM vehicles found that rental companies fix only half of recalled vehicles within a year, according to car manufacturers.
Rental companies dispute the findings, saying the data is incomplete and does not include rental cars sold to third parties before the official recall date.
(Reporting by Chris Michaud. Editing by Peter Bohan and David Gregorio)