I 112th CONGRESS 2d Session H. R. 5946 IN THE HOUSE OF REPRESENTATIVES June 12, 2012 Mr. Markey (for himself, Ms. Tsongas, and Mr. Andrews) introduced the following bill; which was referred to the Committee on Armed Services A BILL To direct the Undersecretary of Defense (Comptroller) to carry out a pilot program to develop innovative consumer financial products that encourage savings and wealth-creation among active-duty servicemembers.
1.
Short title
This Act may be cited as the Military Savings Act of 2012.
2.
Consumer financial products pilot program
(a)
In general
The Undersecretary of Defense (Comptroller) shall carry out a 5-year pilot program to develop innovative consumer financial products that encourage savings and wealth-creation among active-duty servicemembers. (b)
Objectives
Financial products developed under this section may seek to— (1)increase the rate of savings among active-duty servicemembers by providing automatic deposit into a savings account of special pay and allowances received by a servicemember, including special pay and allowances received on account of the ser­vice­mem­ber’s deployment; (2)reduce the need for high-cost short-term lending services by providing alternatives to ser­vice­mem­bers, such as financial institutions providing an option for ser­vice­mem­bers to receive advances on their salary payments, such that ser­vice­mem­bers receive pay in more frequent installments, and where any interest or fees on such advances shall not exceed the rate described in section 987(b) of title 10, United States Code and shall adhere to the Affordable Small Dollar Lending Guidelines of the Federal Deposit Insurance Corporation; (3)address obstacles to traditional consumer banking and lending for servicemembers with limited credit history; and (4)otherwise encourage savings and wealth-creation among active-duty servicemembers. (c)
No exacerbation of credit overextension
The pilot program carried out under this section shall be carried out in such a way that it does not exacerbate the incidence of credit overextension among servicemembers. (d)
Implementation
(1)
Selection of military installations
The Undersecretary shall choose at least 10 military installations on which to implement the pilot program. (2)
Incorporation into operating agreements
With respect to a military installation chosen by the Undersecretary under paragraph (1), a financial institution seeking to begin operating on such installation, or seeking to renew an agreement to operate on such installation, shall— (A)agree to offer the consumer financial products developed under this section; and (B)notify servicemembers that are customers of the institution about the availability of the consumer financial products developed under this section. (e)
Consultation
In developing consumer financial products under this section, the Undersecretary shall consult with Federal banking regulators with expertise in depository institutions, Federal agencies with experience regulating financial products, and consumer and military service organizations with relevant financial expertise. (f)
Independent evaluation
(1)
In general
Not later than the end of the 2-year period beginning on the date of the enactment of this Act, and annually thereafter until the end of the pilot program, the Undersecretary shall contract for an independent evaluation of the pilot program carried out under this section. Such evaluation— (A)shall include the degree to which the pilot program succeeded in the goals of increasing usage of savings products, programs, and tools; and (B)shall be conducted by a contractor with knowledge of consumer financial products and experience in the evaluation of such products. (2)
Report
After each evaluation carried out pursuant to paragraph (1), the Undersecretary shall issue a report to the Committees on Armed Services and Financial Services of the House of Representatives and the Committees on Armed Services and Banking, Housing, and Urban Affairs of the Senate containing all findings and conclusions made by the contractor in carrying out such evaluation. (g)
Expansion of pilot program
Notwithstanding subsection (a), the Undersecretary may expand the pilot program, including extending the duration of the program and expanding the program to make it a nationwide program, to the extent determined appropriate by the Undersecretary, if the Undersecretary determines that such expansion is expected to— (1)improve the rates of savings among ser­vice­mem­bers and their families; or (2)decrease the need for servicemembers and their families to rely on payday lenders without exacerbating credit overextension. (h)
Financial institution defined
For purposes of this section, the term financial institution means an insured depository institution (as defined under section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2))) or a credit union.