The senseless rollback of consumer protections for military families
“The Trump administration is taking aim at a law designed to protect military service members from getting cheated by shady lending practices. NPR has obtained documents that show the White House is proposing changes that critics say would leave service members vulnerable to getting ripped off when they buy cars. Separately, the administration is taking broader steps to roll back enforcement of the Military Lending Act.”
Keeping our financial lives healthy depends on two things: consumer protection and financial education. Consumer protection gives us the laws and regulations that prevent and punish abusive practices by banks, lenders, and other financial companies. Financial education empowers us to spot red flags and make smart money decisions.
The challenge for government and financial literacy advocates is to fortify and expand each of these through compassionate lawmaking and effective education.
The current administration’s latest assault on consumer protections—this time on the people who protect all of us—shows the reach of its cynical and nuance-free view of the consumer landscape. Essentially, it amounts to “regulation bad, deregulation good.” For people who’ve dedicated careers to protecting and educating consumers, it’s disheartening. For consumers, it’s devastating.
Military members and their families face financial obstacles the likes of which civilian families rarely do. I saw it firsthand when I visited Fort Bragg last year. Cashflow issues, frequent moves, and unimaginable stress leave them vulnerable to the unscrupulous lenders that encircle military installations. The Trump Administration would essentially stop policing payday lenders and auto dealers under the Military Lending Act, potentially allowing these shady actors to gouge military consumers with exorbitant interest rates and overpriced add-on products.
A few years ago, when I was serving on the President’s Advisory Council on Financial Capability, I had the chance to work with Holly Petraeus and see in action how government is supposed to work for our military. Newly appointed to head the Consumer Financial Bureau’s Office of Servicemember Affairs, Petraeus detailed her plan to coordinate federal and state activities to boost consumer protections for military families.
“The financial well-being of our military personnel is not just an issue of dollars and cents,” Petraeus told Congress at the time. “Financial problems can be a dangerous distraction for our troops and are the No. 1 cause of lost security clearances.”
Petraeus also understood the two-pronged approach that goes into fostering healthy financial lives: consumer protection and financial education. “No amount of prosecutors can stop every scammer or predatory lender,” she said, “so we must provide the right tools to servicemembers so they recognize the red flags and make sound financial choices.”