[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
 LEGISLATIVE HEARING ON H.R. 4115, H.R. 4740, H.R. 3860, AND H.R. 5747

=======================================================================

                                HEARING

                               before the

               SUBCOMMITTEE ON ECONOMIC OPPORTUNITY (EO)

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                        THURSDAY, JUNE 21, 2012

                               __________

                           Serial No. 112-69

                               __________

       Printed for the use of the Committee on Veterans' Affairs



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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida               BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado               CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida            SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee              MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana          LINDA T. SANCHEZ, California
BILL FLORES, Texas                   BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey               TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan               JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York          RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
MARK E. AMODEI, Nevada
ROBERT L. TURNER, New York

            Helen W. Tolar, Staff Director and Chief Counsel

                                 ______

               SUBCOMMITTEE ON ECONOMIC OPPORTUNITY (EO)

                 MARLIN A. STUTZMAN, Indiana, Chairman

GUS M. BILIRAKIS, Florida            BRUCE L. BRALEY, Iowa, Ranking
BILL JOHNSON, Ohio                   LINDA T. SANCHEZ, California
TIM HUELSKAMP, Kansas                TIMOTHY J. WALZ, Minnesota
MARK E. AMODEI, Nevada

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                             June 21, 2012

                                                                   Page

Legislative Hearing On H.R. 4115, H.R. 4740, H.R. 3860, and H.R. 
  5747...........................................................     1

                           OPENING STATEMENTS

Chairman Marlin A. Stutzman......................................     1
    Prepared Statement of Chairman Stutzman......................    22
Hon. Bruce L. Braley, Ranking Democratic Member..................     1
    Prepared Statement of B. Braley..............................    22
Hon. Elijah Cummings (MD-7)......................................     2
    Prepared Statement of Hon. Cummings..........................    22
Hon. John Garamendi (CA-10)......................................     4
    Prepared Statement of Hon. Garamendi.........................    23
Hon. Steve Stivers (OH-15).......................................     6
    Prepared Statement of Hon Stivers............................    24

                               WITNESSES

Mr. Ryan M. Gallucci, Deputy Director, National Legislative 
  Service, Veterans of Foreign Wars of the United States.........     8
    Prepared Statement of Mr. Gallucci...........................    25
Mr. Steve L. Gonzalez, Assistant Director, National Economic 
  Commission, The American Legion................................    10
    Prepared Statement of Mr. Gonzalez...........................    26
Major General Andrew ``Drew'' Davis, USMC (Ret.).................    12
    Prepared Statement of Mr. Davis..............................    29
Mr. John S. Odom, Jr., Esq., Jones and Odom L.L.P................    13
    Prepared Statement of Mr. Odom...............................    33
Mr. Mike Frueh, Director, Loan Guaranty Service, Veterans 
  Benefits Administration, U.S. Department of Veterans Affairs - 
  Prepared Statement only........................................    36
    Accompanied by:

      Mr. John Brizzi, Deputy Assistant General Counsel, U.S. 
          Department of Veterans Affairs
Mr. John K. Moran, Deputy Assistant Secretary for Operations & 
  Management, Veterans' Employment and Training Service, U.S. 
  Department of Labor - Prepared Statement only..................    38
    Accompanied by:

      Ms. Gerri F. Fiala, Deputy Assistant Secretary, Employment 
          and Training Administration, U.S. Department of Labor
Mr. Frederick E. Vollrath, Principal Deputy Assistant Secretary 
  of Defense for Readiness and Force Management, U.S. Department 
  of Defense - Prepared Statement only...........................    39

                       STATEMENTS FOR THE RECORD

Mr. Thomas E. Perez, Assistant Attorney General, Civil Rights 
  Division, U.S. Department of Justice...........................    41

                   MATERIALS SUBMITTED FOR THE RECORD

The American Legion..............................................    44
Veterans of Foreign Wars.........................................    44
Disabled American Veterans.......................................    45
Paralyzed Veterans of America....................................    46
Military Officers Association of America.........................    46

             MATERIALS SUBMITTED FOR THE RECORD (continued)

Democratic Staff Report on: Fighting On The Home Front: The 
  Growing Problem of Illegal Foreclosures Against U.S. 
  Servicemembers.................................................    47


 LEGISLATIVE HEARING ON H.R. 4115, H.R. 4740, H.R. 3860, AND H.R. 5747

                        Thursday, June 21, 2012

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Economic Opportunity,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:09 a.m., in 
Room 334, Cannon House Office Building, Hon. Marlin A. Stutzman 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Stutzman, Johnson, Braley, and 
Walz.

         OPENING STATEMENT OF CHAIRMAN MARLIN STUTZMAN

    Mr. Stutzman. Good morning. I welcome each of you to the 
Subcommittee on Economic Opportunity of the Veterans' Affairs 
Committee.
    Today we will take testimony on four bills, H.R. 3860, the 
Help Veterans Return to Work Act, introduced by the Honorable 
John Garamendi; H.R. 4115, the Hire at Home Act, introduced by 
the Honorable Steve Stivers; H.R. 4740, the Fairness for 
Military Homeowners Act of 2012, introduced by the Honorable 
Duncan Hunter; and H.R. 5747, the Military Homes Protection 
Act, introduced by the Honorable Elijah Cummings.
    Welcome to each of you. And since we have a full set of 
witnesses today and we have votes coming up, I think I will 
just dispense with the full remarks and recognize the 
distinguished Ranking Member for any remarks that he has at 
this time.

    [The prepared statement of Hon. Marlin Stutzman appears in 
the Appendix]

          OPENING STATEMENT OF HON. BRUCE L. BRALEY, 
                   RANKING DEMOCRATIC MEMBER

    Mr. Braley. Thank you, Mr. Chairman, for holding this 
legislative hearing.
    I want to welcome all my colleagues. We are delighted to 
have you here and we appreciate your interest in the issues 
that this Subcommittee deals with which is one of the most 
important areas that we face as a country and how we help our 
veterans who have done so much for us by doing more than just 
slapping on the back and telling them good job. Maybe it is 
time we all stood together and found out how we are going to 
provide them with good-paying jobs. So we appreciate your being 
here.
    I know that the end of the second session is quickly 
approaching, so I am glad we are taking this opportunity to 
review important legislation that will be beneficial to 
veterans.
    The bills included in today's hearing seek to improve 
employment opportunities for veterans and enhance protections 
under the Servicemembers Civil Relief Act.
    The four bills included in today's hearing will provide for 
employment and training, help veterans return to work, help 
veterans refinance their mortgages, and improve protections 
against foreclosures for veterans.
    I would also like to take the opportunity to congratulate 
Representative Cummings for the inclusion of his bill, Military 
Family Home Protection Act and the National Defense 
Authorization Act of 2013. The bill has been passed by the 
House of Representatives with 299 votes in support which is a 
great example of bipartisan work on behalf of our veterans.
    As you are aware, the Committee democratic staff and your 
staff are working closely through that process.
    I would also like to thank the Chairman of the Full 
Committee and his staff for including this important 
legislation at today's hearing. It is good to know that we can 
work together in the spirit of bipartisanship to provide 
housing protections to servicemembers, veterans, and their 
families.
    Mr. Chairman, since the end of the second session is fast 
approaching, I hope we can make the most of our time. I know 
that some other bills that I suggest we review include the 
Veterans Work Study Opportunities Act, the Ensuring Quality for 
Education Act, the Wounded Veteran Job Security Act, the Revamp 
with Community Colleges Act, and the Military and Veterans 
Education Protection Act as well as my own Veterans Job Corps 
Act. So I look forward to working with you and all the Members 
of the Subcommittee in making that happen.
    And I yield back.

    [The prepared statement of Hon. Bruce L. Braley appears in 
the Appendix]

    Mr. Stutzman. Thank you.
    Our first panel is composed of the Members whose bills we 
are reviewing today. We have with us Mr. Cummings, Mr. 
Garamendi, and Mr. Stivers. Welcome.
    And, Mr. Cummings, I believe you are the senior Member and 
so we will start with you and then we will have Mr. Garamendi 
and then Mr. Stivers. And you will each be recognized for five 
minutes and your complete written testimony will be made part 
of the record.
    With that, Mr. Cummings.

           OPENING STATEMENT OF HON. ELIJAH CUMMINGS

    Mr. Cummings. Thank you very much, Chairman Stutzman and 
Ranking Member Braley and Members of the Subcommittee, for 
inviting me to testify here today on H.R. 5747, the Military 
Family Home Protection Act.
    For the past several years and particularly as Ranking 
Member of the House Oversight Committee, it has been my number 
one priority to help millions of American families who have 
been trying to protect their homes against foreclosure during 
the economic crisis that has gripped our Nation.
    In my opinion, nobody is more deserving of our help than 
our military servicemembers fighting overseas.
    H.R. 5747 is a common-sense bill that would expand the 
Servicemembers Civil Relief Act to protect more of our brave 
men and women in uniform from losing their homes while they 
protect our freedoms abroad.
    This legislation is supported by The American Legion, 
Veterans of Foreign Wars, Paralyzed Veterans of America, 
Disabled American Veterans, and the Military Officers 
Association of America, all of whom have written letters of 
support. And I respectfully ask that these letters be included 
in the record.
    In addition, this legislation has already been passed by 
the House, as Mr. Braley said, as an amendment to the National 
Defense Authorization Act that I offered with Ranking Member 
Filner and Ranking Member Smith of the Armed Services 
Committee. It passed by an overwhelming bipartisan vote of 394 
to 27 including the majority Members on this Committee.
    Here is what the legislation would do. First, under current 
law, some home foreclosure protections for servicemembers are 
set to expire at the end of the year.
    So, Mr. Braley, when you talk about urgency of the moment, 
this is rather urgent.
    My legislation would fix that by eliminating the sunset 
provision and ensuring that foreclosure protections are 
extended to 12 months. We need to act this year to make sure 
those protections do not expire.
    The legislation would also ensure that servicemembers 
serving in contingency operations such as Iraq and Afghanistan 
do not have to worry about losing their homes regardless of 
when they were purchased.
    In addition, it would extend foreclosure protections to 
surviving spouses of servicemembers who are killed in the line 
of duty as well as to veterans who are 100 percent disabled due 
to service-connected injuries at the time of discharge.
    Finally, the legislation would prohibit discrimination 
against servicemembers and their families who are covered by 
these protections and it would double penalties to deter future 
violations.
    I crafted this legislation after more than a year of 
investigating cases in which military servicemembers and their 
families sadly had suffered illegal foreclosures and inflated 
fees.
    For example, last July, I issued a staff report documenting 
these abuses entitled Fighting on the Home Front, the Growing 
Problem of Illegal Foreclosures Against U.S. Servicemembers. I 
ask that this report be included in the record.
    In addition, Senator Jay Rockefeller, the Chairman of the 
Senate Commerce Committee joined me in co-hosting a 
congressional forum on this topic with a number of officials 
including Holly Petraeus, the Director of the Office of 
Servicemember Affairs at the Consumer Financial Protection 
Bureau, who appeared alongside servicemembers and others to 
provide recommendations.
    I also want to extend my thanks to Ranking Member Braley 
who participated in that bicameral forum as an original co-
sponsor to my legislation and has been integral to our efforts 
over the past year.
    And I want to thank you again, Congressman.
    The results of our investigation demonstrate the clear need 
for these improvements to the SCRA. Nobody fighting abroad to 
protect our country should also have to fight here at home just 
to keep a home and a roof over the heads of their loved ones.
    I want to thank again the Members of the Committee for 
bringing this bill to this hearing and for supporting my 
legislation. Even though it has passed the House as part of the 
National Defense Bill, I ask that my colleagues on both sides 
of the aisle to continue to work together to ensure that we 
enact these reforms into law.
    And I understand that DoD has some concerns and have some 
amendments. We reviewed those amendments and I have no problem 
with it. Of course, I leave it up to this Committee. You are 
the experts and I would hope that we would not allow any, you 
know, changes like that, concerns on DoD's part to stop this 
legislation. I think that the aim is so very, very important 
and very vital.
    And I think you, Mr. Chairman, and you, Ranking Member, 
made it very clear that our veterans deserve the very, very 
best that we can give. And, again, we want to keep a roof over 
their heads.
    And with that, I yield back.

    [The prepared statement of Hon. Elijah Cummings appears in 
the Appendix]

    Mr. Stutzman. Thank you.
    Before the Chair recognizes Mr. Garamendi, is there any 
objection from the Committee that the written testimony be made 
part of the record as well as the testimony?
    Mr. Cummings. Yeah. There was two documents that I also 
mentioned during my testimony.
    Mr. Stutzman. Okay. No objection. So ordered.

    [The attached appears in the Appendix]

    Mr. Stutzman. Mr. Garamendi, you are recognized for five 
minutes.

            OPENING STATEMENT OF HON. JOHN GARAMENDI

    Mr. Garamendi. Thank you, Mr. Chairman, Ranking Member 
Braley, and Members of the Committee. Thank you for the 
opportunity to testify on behalf of my bill 3860, Help Veterans 
Return to Work Act.
    It is an honor to be before you today and I thank you for 
your continuing work to assist our veterans.
    I represent the 10th district of California, home to Travis 
Air Force Base, the largest air mobility command in the air 
force. And nearby in Marysville, California is Beale Air Force 
Base which is the leader in intelligence, surveillance, and 
reconnaissance, ISR, and major weapons systems including the 
U2, MC-12s, and Global Hawk.
    Together these two bases, Travis and Beale, employ nearly 
16,000 servicemembers across the active-duty spectrum, national 
guard, and reserves. Over 75,000 veterans live in my district 
and the surrounding area.
    My bill, Help the Veterans Return to Work Act, addresses a 
major problem not only in northern California but throughout 
the United States, the tragically high unemployment rate among 
veterans.
    Specifically my bill seeks to increase the reemployment 
rate among veterans by amending the undue hardship provisions 
under the Uniformed Services Employment and Reemployment Rights 
Act.
    Currently an employer is excused from reemploying a 
returning veteran if the employer's circumstances have changed 
in a way that it is now impossible or unreasonable to do so or 
imposes an undue hardship.
    This undue hardship provision is too lenient in allowing 
employers to dismiss employed servicemembers. As a reflection 
of this problem, the number of USERRA complaints and inquiries 
reported to the Employer Support of Guard and Reserve, a 
Department of Defense Agency, increased 164 percent between 
2008 and 2010.
    The Veterans Reemployment Act of 2012 amends the basic law 
so that undue hardship protections apply only to small 
businesses, eliminating the protections that the large 
businesses currently have.
    In May 2012, the Bureau of Labor Statistics' current 
population survey reported the unemployment rate among all 
veterans of all ages was 7.7 percent, slightly below the 
national unemployment rate.
    This dynamic is consistent with historic trends. 
Traditionally veterans' unemployment rate has been lower than 
for nonveterans. Still 7.7 percent among veterans is far too 
high and represents work that we must do.
    The unemployment rate among all veterans pales in 
comparison to the unemployment rate among veterans in the 18 to 
24 year age group which is an alarming 23 and a half percent, 
eight percent over the national unemployment rate for that age 
group which is 15 percent.
    Pretty clear the young men and women returning from war, 
those in the reserves and in the guard have a real serious 
reemployment problem.
    VetJobs, a premier employment service for veterans and a 
witness before this Committee in February 2012, has estimated 
that the unemployment rate among young veterans will increase 
even more as DoD starts to furlough active-duty troops and as 
many of the national guard and reserve brigades start to return 
home from their theaters.
    This unemployment gap must be closed. And as this body has 
made the decision to send these brave men and women to war, it 
is now our responsibility to ensure that they can return home 
to a job that enables them to support themselves and their 
families in the same manner as they did prior to deployment.
    Amending the undue hardship protections under the current 
law which my bill seeks to do will bring us one step closer to 
fulfilling our obligation to our veterans.
    Mr. Chairman, I thank you and the Committee Members. I look 
forward to any questions you may have.

    [The prepared statement of Hon. John Garamendi appears in 
the Appendix]

    Mr. Stutzman. Thank you.
    Mr. Stivers, you are recognized for five minutes.

            OPENING STATEMENT OF HON. STEVE STIVERS

    Mr. Stivers. Thank you, Chairman Stutzman and Ranking 
Member Braley, for holding this important hearing on several 
pieces of legislation today, especially this piece of 
legislation that aims to help returning veterans receive 
employment, the Hire at Home Act.
    I also want to thank my co-sponsor, my lead democratic co-
sponsor, Representative Tim Walz of Minnesota, for his hard 
work on this issue and helping me tackle this important issue.
    This bill is designed to improve the cooperation between 
the military and state agencies to more closely align 
specialized military training with state licensing and 
certification requirements.
    The bill came from an idea at a veterans' roundtable in my 
district in Columbus, Ohio, and I am grateful to the group of 
local young veterans, three of whom are attending the Ohio 
State University and talked about the problems they had in 
getting back to work when they came back from Iraq and 
Afghanistan.
    The number of soldiers returning from Iraq and Afghanistan 
is huge and it makes this effort that much more important.
    And you may know that the unemployment rate among post-9/11 
veterans is 12.7 percent according to the Bureau of Labor 
Statistics.
    By allowing military training in a comparable field to 
count towards certification in the private sector will get 
veterans back to work more quickly and be able to help their 
families.
    Specifically the Hire at Home Act would apply to the 
veterans seeking state certification or license to become a 
state tested nurse assistant, EMT, certified nurse assistant, 
registered nurse, or commercial truck driver.
    This legislation simply ensures that the states consider a 
servicemember's experience by allowing them to skip expensive 
and time-consuming hurdles to employment.
    For example, an army medic who administered medication to 
wounded soldiers and was responsible for their lives on the 
battlefield could not be certified as an emergency medical 
technician in many of our local communities without redundant 
schooling.
    This bill would make the transition much easier and 
alleviate the pressures of unemployment in our veterans' 
communities. One of the best ways to honor the service of our 
veterans is to give them an opportunity to do the same job at 
home without the unnecessary burdens of additional redundant 
training.
    Our bill would accomplish this objective and we are willing 
to work with anybody who has any amendments on the bill and 
look forward to addressing any concerns anybody might have. 
This is, I think, an important bill to help get our veterans 
back to work.
    Again, I appreciate the Chairman and the Ranking Member 
holding this hearing and look forward to working with you 
throughout the course of getting this bill passed.
    Thank you, Mr. Chairman. I yield back.

    [The prepared statement of Hon. Steve Stivers appears in 
the Appendix]

    Mr. Stutzman. Thank you.
    And thank you to each of you for bringing these bills 
forward. And I think they are timely and very sensitive to the 
situation that so many of our veterans face today.
    I do not have any questions for this panel at this time. 
Mr. Braley, any questions or comments?
    Mr. Braley. Well, Mr. Chairman, I just want to make a 
comment.
    At a time when the public perceives that we do not do much 
here to work together, I just want to acknowledge that I 
recently had the opportunity to travel to Iwo Jima with one of 
Mr. Stivers' constituents who is a young marine corps veteran 
attending Ohio State University and having some issues with 
disability payments that he was working on.
    And when I shared that with Mr. Stivers, he could not have 
been more accommodating and we have been working together on 
making sure this young man gets everything he deserves. And I 
think that is one of the things that we often ignore when we 
talk about what is happening in Washington.
    I just wanted to thank him for his great advocacy on behalf 
of that young man.
    Mr. Stutzman. Mr. Walz.
    Mr. Walz. No questions.
    Mr. Stutzman. Okay. Seeing there are no further questions, 
I thank each of the Members for their testimony. And at this 
time, I will let you all move on and I thank you for being 
here.
    At this time, I ask the second panel to come forward. With 
us today is Mr. Ryan Gallucci from the Veterans of Foreign 
Wars; Mr. Steve Gonzalez representing The American Legion; 
Major General Andrew Davis from the Reserve Officers 
Association; and Mr. John Odom, Esquire, a former Air Force JAG 
officer and one of the authors of the 2003 rewrite of the 
Servicemembers Civil Relief Act, and now Mr. Odom is in private 
practice.
    And we thank each of you for being here and we look forward 
to each of your testimony. You will each be recognized for five 
minutes and your complete written testimony will be made part 
of the record.
    Is there any objection from the Committee?

    [No response.]

    Mr. Stutzman. No objection. So ordered.
    We will start with Mr. Gallucci and we will move to my 
right.
    Mr. Gallucci, you are recognized for five minutes.

   STATEMENTS OF RYAN M. GALLUCCI, DEPUTY DIRECTOR, NATIONAL 
  LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
    STATES; STEVE L. GONZALEZ, ASSISTANT DIRECTOR, NATIONAL 
    ECONOMIC COMMISSION, THE AMERICAN LEGION; ANDREW DAVIS, 
 EXECUTIVE DIRECTOR, THE RESERVE OFFICERS ASSOCIATION; JOHN S. 
            ODOM, JR., ESQ., JONES AND ODOM, L.L.P.

                 STATEMENT OF RYAN M. GALLUCCI

    Mr. Gallucci. Thank you, Chairman Stutzman.
    Chairman Stutzman, Ranking Member Braley, and Members of 
the Subcommittee, on behalf of the more than two million 
members of the VFW and our auxiliaries, I want to thank you for 
the opportunity to testify on today's pending legislation.
    With the end of the conflict in Iraq, withdrawal from 
Afghanistan imminent and proposals to lean on national guard 
and reserve personnel for future routine missions, the VFW 
believes discussing how to protect our servicemembers and 
veterans within the workforce must remain a national 
imperative.
    Despite continuing efforts within the Federal Government 
and across private industry, recent unemployment numbers for 
veterans of the current conflicts indicate that we are not 
solving the problem. And the VFW is encouraged to see that this 
Subcommittee continues to take the situation seriously and we 
are honored to share our thoughts on today's bills.
    The VFW understands the goal of the Help Veterans Return to 
Work Act is to ensure that large businesses can no longer claim 
undue hardship as a reason to shirk their USERRA obligations.
    However, the VFW cannot support this bill which we believe 
would make members of the national guard and reserve 
unattractive employees to large companies.
    This issue is truly a double-edge sword. The VFW wholly 
supports strong legal protections for members of the guard and 
reserve, but we understand that the relationship between our 
reserve component and civilian employers must be equitable for 
both parties.
    We feel the current provisions through which large 
businesses can claim undue hardship offer both the 
servicemember and the employer reasonable due process in 
resolving reemployment disputes.
    If we put so many legal constrictions on hiring members of 
the reserve component, our servicemembers will be perceived as 
a legal liability to potential employers large and small.
    A recent report from the Center for a New American Security 
cited USERRA compliance as a key challenge for employers who 
would consider hiring veterans.
    To the VFW, this implies that the perception of USERRA 
among employers may actually prevent servicemembers and 
veterans from ever getting in the door.
    In light of this bill and other concerns over USERRA, we 
invite the Subcommittee to host a separate hearing or 
roundtable discussion on USERRA in the 21st century to better 
understand how this law should be implemented, how it should be 
enforced, and how we can best serve the interests of our 
reserve component servicemembers down the road.
    The VFW fully supports the Hire at Home Act. Over the last 
few years, we have heard growing concerns of veterans who 
receive years of practical work experience cannot receive state 
licenses without jumping through hoops when they return home.
    The VFW understands that states have the right to license 
professionals as they see fit within their borders. However, 
the VFW believes that states also have an obligation to 
evaluate military experience once a veteran leaves active duty.
    The Hire at Home Act will ensure that states critically 
evaluate military training when considering veterans for 
licensure in four key fields where we have seen high veteran 
unemployment.
    The VFW and our partners in The American Legion 
successfully pushed for a Senate companion bill with some minor 
changes which we would like to see the Subcommittee also 
consider in markup. The changes detailed in my written 
statement outline how states would report licensing gaps to the 
Department of Labor and how Labor would share this information 
with the Pentagon to close such gaps.
    The VFW believes this bill is a responsible first step in 
ensuring veterans can transition seamlessly into careers that 
the military has diligently prepared them for while preserving 
each state's right to license professionals within their 
borders.
    Moving forward, this concept could prove helpful in closing 
the licensing gap for other MOSs.
    We thank Congressman Stivers for introducing this bill and 
we encourage the Subcommittee to quickly pass legislation that 
reflects the VFW's recommendations.
    The VFW also supports the Fairness for Military Homeowners 
Act and we believe it offers responsible financial relief to 
military homeowners who are forced to frequently change duty 
stations.
    In the past, military homeowners could easily sell or rent 
their properties whenever they needed to move. This all changed 
when the housing bubble burst in 2008. This bill would offer 
relief to military families by allowing military homeowners to 
refinance the mortgage on homes at their duty stations as if 
the home was still a primary residence, avoiding high interest 
rates.
    Congressman Hunter's bill is a common-sense approach that 
will offer reasonable relief to military homeowners which is 
why we encourage the Subcommittee to pass it.
    The VFW also strongly supports the Military Family Home 
Protection Act which seeks to end predatory foreclosures on 
military families whose loved ones are deployed, permanent and 
totally disabled, or who lost their loved ones in the line of 
duty.
    Over the last few years, we have heard horror stories about 
companies foreclosing on military homeowners while 
servicemembers are deployed. This bill seeks to end this 
unconscionable practice by affording specific protections for 
such families. This bill also strengthens penalties for persons 
who knowingly violate certain provisions under the 
Servicemembers Civil Relief Act.
    Never again should a military family worry that the bank 
will seize their home while their loved one is serving overseas 
or after their loved one has made the ultimate sacrifice.
    Military homeowners face unique circumstances that can 
often lead to financial hardship which is why they deserve 
these kind of reasonable accommodations.
    We thank Congressman Cummings for introducing this bill and 
hope the Committee will move quickly on it.
    Mr. Chairman, this concludes my testimony. I would be happy 
to answer any questions the Subcommittee may have.

    [The prepared statement of Ryan M. Gallucci appears in the 
Appendix]

    Mr. Stutzman. Thank you.
    Mr. Gonzalez, you are recognized for five minutes.

                 STATEMENT OF STEVE L. GONZALEZ

    Mr. Gonzalez. Good morning, Mr. Chairman and Ranking Member 
and Members of the Subcommittee. Thank you for this opportunity 
to present The American Legion's view on several pieces of 
legislation being considered by the Committee today.
    The American Legion supports all four pieces of 
legislation, but due to the allotted time available, I will 
concentrate on two out of the four bills, H.R. 5747, Military 
Family Home Protection Act, and H.R. 4115, the Hire at Home 
Act.
    H.R. 5747, Military Family Home Protection Act, while 
servicemembers fight overseas, another war has been brewing 
back home, foreclosures. Since the 2006 collapse of the real 
estate market, tens of thousands of military servicemembers 
have lost their homes to foreclosure. History has shown even 
those putting their lives on the line for their country may not 
be safe from foreclosure.
    America simply cannot afford to have our men and women in 
Iraq, Afghanistan, or elsewhere distracted by concerns over 
whether someone is seeking a default judgment against them back 
home or evicting their spouse and children or selling their 
home at an auction sale.
    H.R. 5747 would provide mortgage protection for members of 
the armed service, surviving spouse, and some veterans. This 
legislation would expand the statute covering servicemembers 
that are part of a contingency operation, that is anyone who is 
or could become involved in military actions, are called up to 
or retained in active-duty service.
    In the past, military servicemembers and their families 
have been foreclosed upon illegally. Whether or not this has 
been due to carelessness or callousness, neither is acceptable.
    H.R. 5747 seeks to strengthen the law to ensure that 
America's servicemembers have ample time to handle financial 
matters.
    The American Legion applauds Representative Cummings for 
his leadership and efforts to tackle and address this issue.
    Next I am going to go to H.R. 4115, the Hire at Home Act. 
In early 1996, The American Legion launched the first 
groundbreaking credentialing report to study those vocational 
skills which the armed services provide training and for which 
a license or certificate is required to work in their 
respective field in the civilian sector.
    Although these outstanding servicemembers possess excellent 
skills, in many cases easily transferrable to civilian careers, 
however, the lack of official recognition of their training has 
hampered a smooth transition from active-duty military service 
to meaningful civilian employment.
    Honorable military servicemembers should advance patriots' 
vocation opportunities rather than stymie their employability. 
These servicemembers and veterans have attended some of the 
finest technical and professional training schools in the 
world. They are graduates with experience in health care, 
electronics, computers, engineering, air traffic control, 
nuclear power plant operations, so on and so forth.
    Many of these skills require some type of license or 
certificate to find a career in the civilian workforce. In all 
too many cases, this license or certificate requires schooling 
which has already been completed by attendance at an armed 
services training institution. Unfortunately, the agencies 
which issue the license or certificate do not recognize the 
training or experience already completed.
    As an example, a medic who treated gunshot wounds in 
Operation Enduring Freedom is qualified as a medic, but would 
not be certified as an emergency medical technician in our 
Nation's cities without additional redundant schooling.
    This is more evident as demand for qualified workers in a 
diverse range of occupation areas continue to grow and 
employers face challenges to fill these occupations because of 
a shortage in the skilled workforce. Employers must begin to 
seek elsewhere to obtain the high-level skills they need to 
fill in their ranks.
    Servicemembers and veterans are a highly trained, skilled, 
disciplined, and dedicated group of men and women, moreover 
represent a unique labor pool that can contribute significantly 
to the Nation to maintain its competitive edge in the global 
economy.
    Servicemembers and veterans receive basic skills and 
training during their military service. Though the veteran's 
career is intended for the defense of America, however, a large 
portion of this training has relevant and direct application to 
the civilian labor workforce upon transitioning from military 
service.
    The American Legion applauds Representatives Steve Stivers 
and Tim Walz for their leadership and efforts to tackle and 
address this issue.
    This Committee should also be aware of additional 
legislation as well as other actions Members of Congress have 
undertaken which will help this problem. They are as follows.
    Representative Denham from California and once again 
Representative Walz have also introduced H.R. 4155, the Veteran 
Skills Work Act, which would streamline the credentialing 
efforts on the Federal level.
    The American Legion thanks the Committee for allowing us to 
testify and if you have any questions, be more than happy to 
answer any questions.

    [The prepared statement of Steve L. Gonzalez appears in the 
Appendix]

    Mr. Stutzman. Thank you.
    Major General Davis, you are recognized for five minutes.

                  STATEMENT OF MG ANDREW DAVIS

    Major General Davis. Good morning. Chairman Stutzman, 
Ranking Member Braley, and Members of the Committee, I am Major 
General Drew Davis, Executive Director of the Reserve Officers 
Association, and I would like to thank you for the opportunity 
to testify this morning.
    I have also been given permission by the Reserve Enlisted 
Association to testify on their behalf.
    The consequences of mobilization and demobilization do not 
solely impact on our military members. It also has an effect on 
their families and their employers. Families and employers play 
a large role in a citizen warrior's decision on whether or not 
to enlist or to reenlist in the reserve force.
    In personnel surveys, employer pressure is listed as one of 
the top two reasons why reservists and guardsmen choose to quit 
military service. Remember that after their initial enlistment, 
they serve voluntarily. That is why it is paramount that we 
work to improve the employability of members of the reserve and 
guard as well as all veterans.
    Unemployment in the 18 to 24-year-old cohort remains high. 
This group principally represents the first tour veterans 
returning from active duty or their initial reserve 
mobilization. It is my belief that despite USERRA protections, 
we are seeing stealth discrimination in first-time hiring 
because of reserve affiliation as demonstrated by about a 
reported eight percent higher unemployment rate for reservists 
than for nonaffiliated veterans.
    I fear the unemployment rate is higher because employers 
are shying away from hiring potential employees who can be 
expected to be recalled to active duty one year out of every 
five as we executive our national defense strategy that retains 
an operational and strategic reserve force.
    That employment discrimination can be subtle and not overt. 
The prospective employer sees the applicant's reserve 
affiliation and says thanks so much for your service, yet after 
the interview, the application and the resume end up in the 
round file.
    The employer, particularly of the small business or 
municipality, knows that he will have to cover a one year in 
five absence.
    H.R. 3860, the Help Veterans Return to Work Act, would help 
with reemployment. If enacted, it would tighten up USERRA by 
permitting only small business concerns to claim hardship if 
unable to rehire a reserve component member.
    H.R. 4115, the Hire at Home Act, codifies the need to 
credit any such military training as one of the program 
functions of the assistant secretary of Labor for Veterans' 
Employment and Training.
    Additionally, ROA and REA encourage the implementation of 
any means that would credit veteran employees' experience 
gained through their military service.
    Stresses at home are the second leading factor causing 
reserve and guard members to drop from the ranks after their 
return from deployment. Financial problems are a top conflict, 
creating stress in military families.
    Mortgage protection under the Servicemembers Civil Relief 
Act helps reduce this stress.
    H.R. 4740, Fairness for Military Homeowners Act of 2012, 
protects serving members from being denied refinancing should 
they no longer reside in their premises because of relocation 
caused by a permanent change of station or a deployment of 18 
months or longer.
    As a number of selected reservists are also full-time 
members of the active reserve or active guard, ROA and REA 
support this bill.
    H.R. 5747, the Military Family Home Protection Act, while 
noble in intent, has some inconsistencies in how it defines 
mobilization. The mortgages of servicemembers deploying out of 
the continental United States are protected, while those 
serving on CONUS duty are not.
    A message that ROA and REA always take to Capitol Hill is 
the need for parity as often the reserve and guard do the 
mission without receiving the same benefits.
    As stated in our written testimony, ROA and REA can endorse 
the intent of H.R. 5747, but feel that if mortgage protections 
are going to be expanded under SCRA, the language needs to be 
revised to not inadvertently exclude a group that should be 
included.
    ROA is willing to work with the Committee on this 
legislation.
    Reserve Officers Association established the Servicemembers 
Law Center with retired navy captain Sam Wright as director. 
This service is provided to all members of the uniformed 
services. Captain Wright receives on average 500 calls a month 
and 800 last month from veterans facing legal problems on 
USERRA and SCRA issues.
    ROA would like to share our garnered knowledge with the 
Committee as we see trends and problems facing our serving 
members. Leading the list are USERRA enforcement issues 
followed by problems with financial institutions and health 
care access.
    ROA would like to thank the Committee and its staff for its 
attention to this critical issue, which has become increasingly 
more important and a concern for both veterans and their 
families.
    We look forward to continuing to work with the Committee 
and staff.

    [The prepared statement of MG Andrew ``Drew'' Davis appears 
in the Appendix]

    Mr. Stutzman. Thank you.
    Mr. Odom, you are recognized for five minutes.

                 STATEMENT OF JOHN S. ODOM, JR.

    Mr. Odom. Thank you.
    Chairman Stutzman and Ranking Member Braley and Members of 
the Subcommittee, I am John Odom. I am an attorney at law from 
Shreveport, Louisiana.
    I have listened to the other panel members and let me just 
tell you I am the guy that comes along and sues the banks when 
they do not follow the act. So this is what I do for a living. 
This is my area of practice.
    The vast majority of my practice is representing veterans 
and current servicemembers against individuals and banks and 
credit institutions that have violated their rights under the 
SCRA.
    I was lead counsel for Sergeant James Hurley in the big 
suit against Deutsche Bank and Saxon Mortgage Services in 
Michigan that led to Congress actually reenacting a new 
provision or enacting a new provision to clarify that there is 
a private cause of action to sue people who violate their 
rights.
    So I teach at all three of the service judge advocate 
schools. I have authored books on this. I have written 
extensively on it. So I come to you with a practical viewpoint 
of the two bills on which I am testifying this morning.
    H.R. 4740, first of all, I fully support the concept that a 
servicemember should be able to refinance a home during a 
period of active duty even though they may not be residing in 
the residence as a result of military orders.
    I understand from legal assistance attorneys who call me 
dozens of times a month from around the world that certain 
mortgage companies take the policy position that a mortgagor 
may only refinance the home if they are currently residing in 
the home.
    Obviously if the absence from the home is as a result of 
military orders, whether it is a mobilized guardsman or 
reservist who is stationed away from his primary residence or 
if it is a permanent party or an active-duty member who is 
stationed away from her home because she got PCS orders and had 
to move before she could sell the house, it is manifestly 
unfair to not allow servicemembers to refinance their homes.
    However, the Servicemembers Civil Relief Act protects pre-
service mortgages from nonjudicial foreclosure in Section 303 
of the act. Under 4740 as drafted, a refinancing of a mortgage 
while a servicemember is on active duty would cause the 
servicemember to lose the protections of Section 303 because 
the new mortgage would no longer be a pre-service obligation.
    I do not think you wanted to do that. I suggested 
additional language could be added to 4740 to provide that any 
refinancing accomplished pursuant to the section would not 
alter the status of the mortgage as a pre-service mortgage. 
Again, this is what happens when you trigger the dreaded law of 
unintended consequences.
    As a final comment on 4740, I also question why the 
proposed amendment requires that a deployment be for a period 
of not less than 18 months. The period of deployment 
concurrently provided for lease cancellations under Section 
305, for example, is not less than 90 days.
    I know that a lot of our guard and reserve units do not 
deploy for 18 months, so why would you want to give the 
protection only to those people for whom I do not think we are 
going to be seeing deployment orders for that length of time? 
So I suggest that you might want to look at that.
    Turning to 5747, while the goals are truly laudable, it 
presents a significant expansion of the SCRA and I think you 
need to evaluate it very closely for two primary reasons.
    First, with regard to foreclosures, the amendment simply 
cannot be realistically implemented as it is drafted and, 
secondly, it does not fully accomplish what I think Mr. 
Cummings meant to do with his bill.
    I agree completely with Mr. Cummings and the bill's co-
sponsors that the home of any servicemember who is deployed 
should simply never be subject to foreclosure. Judicial or 
nonjudicial, regardless of when the mortgage was incurred, 
before service or during service, there are simply too many 
factors that cannot be anticipated when a servicemember deploys 
and communication is too difficult from war zones for banks and 
mortgage companies to be seizing and selling servicemembers' 
homes while they are off in harm's way.
    While we agree on that fundamental position, I am equally 
concerned that this Congress not change Section 303 which 
places the onus on creditors to ascertain the military status 
of an individual before they begin a nonjudicial foreclosure 
action.
    Under the current Section 303, the servicemember does not 
have to give any notice to the creditor. The best way to 
accomplish the proposed expansion of mortgage foreclosure 
protections contemplated by 5747 would be to insert a 
completely new Section 303A into the act.
    If you want to protect deployed individuals, regardless of 
whether they live in a nonjudicial foreclosure state which is 
27 of our states or a judicial foreclosure state which is 23 of 
our states, and if you want to protect them from both judicial 
foreclosure, nonjudicial foreclosure, and foreclosures on both 
pre-service and during service mortgages, do it, but write it 
in a separate section that is clearly titled as such.
    If you want to expand the protections to wounded warriors 
and to surviving spouses, that is a policy decision that the 
Congress will have to make and that is certainly a good goal. 
But there is no searchable database now in which a proposing 
mortgage foreclosure creditor could ascertain whether someone 
is a surviving spouse or whether someone is a wounded warrior.
    I find it really ironic that I am sort of taking the side 
of industry, but fair is fair here. If you enact this bill as 
written, it is unfair. It is unfair to the banks and although I 
make a lot of money off of certain banks, I have to tell you I 
do not think this one is practical.
    I think it could be changed if you either amended 5747 or 
did an entirely new act. My written remarks, I have drafted a 
proposed Section 303A that I think would work, but as drafted, 
I cannot support 5747 and suggest to you that you are making 
compliance unreasonably complicated for the banks in that 
regard.
    As for the remaining protections in 5747, I wholeheartedly 
endorse and recommend approval. You need to eliminate the 
sunset provision on the extension of nonjudicial mortgage 
foreclosures. The addition of a prohibition against credit 
discrimination for persons who may become protected by the act, 
that is a great idea. And the requirement for SCRA compliance 
officers, all of those are good ideas.
    I would only caution the Subcommittee about this and I will 
quit. Just because a person may be designated as an SCRA 
compliance officer at a large bank does not mean that he or she 
has the foggiest idea of what the SCRA is or how it is supposed 
to be implemented.
    I would urge if you enact that portion to have appropriate 
oversight for any compliance efforts imposed on the financial 
services industry because in my past experience, to put it 
charitably, many of them know not of what they speak.
    Thank you for your time. I am happy to work with Committee 
or staff on any amendments and I am open to any questions. 
Thank you, sir.

    [The prepared statement of John S. Odom appears in the 
Appendix]

    Mr. Stutzman. Thank you.
    It sounds like if you run out of any lawsuits, you have the 
ability to do a lot of consulting to the banking industry if 
need be. But thank you for your testimony.
    I just want to make this comment. They have called the 
votes at eleven o'clock and I would like to get everybody's 
testimony in, but we do want to make sure we have time for 
questions because we are going to be going until--votes will be 
going until about 1:30 and I know folks have flights to catch. 
So I would like to try to adjourn by the time we are done.
    So I have got two questions and the first one is for Mr. 
Gallucci. Can you go into detail on the potential impact of 
H.R. 3860? What kind of impact could that have on 
servicemembers' ability to be employed by large employers?
    Mr. Gallucci. Absolutely. I am glad you asked that 
question, Chairman.
    The concern that we have really has to do with the 
veteran's ability to get through the door. When you look at the 
unemployment statistics for veterans even in the age group 18 
to 24, it is our belief that we are not necessarily talking 
about veterans who are asking for reemployment. These are 
veterans who are looking for first-time employment.
    And what we saw in the report from the Center for a New 
American Security was that one of the top concerns for 
potential employers when considering hiring a servicemember or 
a reserve component servicemember or a veteran was the 
perpetual threat of a military obligation.
    Now, one of our concerns beyond this, beyond reserve 
component servicemembers is that within the civilian military 
disconnect, there is a general misunderstanding of the 
difference between a reserve component servicemember and a 
veteran.
    Myself, I have been asked on job interviews when discussing 
my military service whether or not I would have to go back. I 
left the military in 2007. That is absolutely not a concern 
that I would be recalled to active duty.
    So our concern is that when we are talking about these 
daunting unemployment figures for Iraq and Afghanistan veterans 
that we run the risk of making them even more unattractive to 
large employers if we do away with the due process through 
which an employer could demonstrate that there may have been a 
hardship, there may have been a reduction in force, and it may 
be necessary to let a certain employee go.
    Now, what we do support is stronger enforcement of USERRA 
policy. This is where we see the major gap, when state 
attorneys general are only prosecuting eight percent of the 
USERRA complaints that come through their offices, when we hear 
from Department of Labor that they are running up against major 
defenses from the legal teams of these major corporations. That 
is not necessarily because of the undue hardship clause. That 
will continue. They will continue to fight for why they do not 
need to live up to their USERRA obligation. So we are concerned 
that this on the front end would impact veterans in their 
ability to land a job to begin with.
    Mr. Stutzman. Thank you.
    Mr. Braley.
    Mr. Braley. Mr. Gallucci, I just want to follow-up briefly 
on that last comment because when we did field hearings last 
summer, it was obvious that a lot of the larger employers 
because they have more sophisticated human resources department 
have a greater understanding of how MOS qualifications can 
translate into civilian work requirements.
    And we talked about the fact that those larger employers, 
many of whom hire a large number of veterans, can do a lot to 
help educate medium and small size employers understand how to 
make that Rosetta Stone translation which is a big mystery to 
many of them.
    But the other side of that sword is that they also have a 
lot more sophistication in how to use a doctrine of reduction 
in force to justify almost any termination of employment.
    And so I think when we talk about the benefits of wanting 
to make sure that those employers have incentives to hire 
unemployed veterans, also have to realize that they have much 
more sophisticated practices sometimes as saying, as General 
Davis said, a stealth discrimination in how you resolve a back-
end resolution of somebody's employment status. So I appreciate 
your comments.
    And one of the things you talked about, Mr. Odom, was this 
concern about Section 303 and the ability of creditors to 
ascertain military status of mortgagers prior to nonjudicial 
foreclosures.
    When J.P. Morgan testified recently about their practices, 
they talked about using the Defense Manpower Data Center as a 
way of trying to address that concern.
    What experience do you have with that data center and what 
problems or solutions need to be addressed before it can truly 
be a searchable database that addresses the concerns that you 
raised?
    Mr. Odom. Thank you, sir.
    I do not think you need to change the DMDC database at all. 
It is one of the most effective and efficient departments of 
any executive agency of the government. It is amazing what 
those people can do.
    But you would actually be asking their computer system to 
talk to the VA's computer system because those are the folks 
that declare the wounded warriors and issued those hundred 
percent disability letters. Those systems do not talk to one 
another.
    And then I actually think on the surviving spouse thing, I 
want you all to consider there might be a force protection 
issue here. I mean, a surviving spouse may not go into default 
and a surviving spouse may not want his or her name in a 
searchable database.
    If I was the surviving spouse of a member who had been 
killed in a particularly sensitive military operation, I would 
not want my name in a database. And I think we have to remember 
that.
    Mr. Braley. Sure.
    Mr. Odom. But the database is not the big issue. The big 
issue can be completely solved. If you want to expand it into 
these three additional categories of people who now are not in 
a searchable database, simply establish in a separate section a 
requirement that those people give notice to J.P. Morgan or 
Citi or Wells or whoever. It is a simple notice.
    Okay. Now I am in a newly protected category and I demand 
protection for the 12 months that I am entitled to it. That is 
a completely different thing, sir, than saying that we are 
going to put that in 303.
    With all due respect, and, again, I sue banks, this is what 
I do, they cannot get 303 straight now. If you make it 
infinitely more complicated, well, I will just have more 
business. But we need to be thinking about how we can protect 
the people instead of whether I can make money for them on the 
back end.
    Once you have lost your home, it is gone.
    Mr. Braley. Sure.
    Mr. Odom. And that is a terrible thing for these folks that 
they come home and their home is gone. And it is years to 
straighten these messes out.
    So my recommendation, sir, is that you not change the DMDC 
database. It is working quite well for what it is intended for. 
If you want to expand, do it in a separate section, denominate 
it as such, and make those additionally protected people who 
want this protection give written notice to the creditor. That 
seems fair to me.
    Thank you, sir.
    Mr. Braley. You are welcome.
    Just before I wrap up, one of the things that Mr. Gallucci 
raised was the whole issue of licensure and how that impacts 
people's attempt to get unemployment when they have already 
gone through extensive training.
    I am curious what your organizations, General Davis, Mr. 
Gonzalez, Mr. Gallucci, have done with state legislators 
because it seems to me that we have seen a solution in some 
ways where when you have got these licensing codes and there 
are specific requirements of education, training, and work 
experience to get a license that you include language, kind of 
catch-all language to the end of those descriptions that says 
or other equivalent education, training, and work experience.
    Have you had any experience in trying to get the 
legislators to move to make it easier for military occupation 
specialties to translate into civilian employment?
    Mr. Gonzalez. Mr. Braley, speaking on behalf of The 
American Legion, we have taken a couple of different 
initiatives to address this issue.
    One has been on June 12th, we had a meeting with 
credentialing boards at The American Legion with the army 
training and doctrine to start looking at and reevaluating some 
of the actual programs of instruction and how high-demand jobs, 
of course, we selected eight different MOSs or military 
occupations within the army to look at the program of 
instruction, how they are training the individual soldiers at 
the what they call schoolhouses of training venues and 
locations to start actually having the credentialing body who, 
first of all, does not require state nor Federal legislation to 
have these particular industries to start certifying and 
credentialing the servicemembers which, of course, to 
transition into not just employable jobs but also with jobs 
that actually contribute back to the economy where the 
servicemember is not employed and not taken away from the 
economy per se.
    So that is one avenue that The American Legion has taken. 
The other one has been working very closely with Congressman 
Walz's office as well as Congressman Denham's office from 
California who also sits on not this Committee but the overall 
Committee on addressing the Federal issue.
    As it currently stands, you have 82 licensures that are 
issued by the Federal Government, so FAA, FCC, Homeland 
Security issue specific licenses within their respective 
civilian counterpart jobs.
    This particular legislation should it pass, it will require 
that the Federal Government per se have the authority to look 
at, and when I say relevant, it is more of even though you are 
not trained in a particular, say, the front end in the 
schoolhouse, what ends up happening is through your time in the 
military, you will end up gaining some other experiences that 
could be documented.
    And once it is documented and you transition out of the 
service, that documentation can be presented to these 
authorities that can evaluate and also by evaluation take that 
particular evaluation and marry it up with what they have in 
their particular system and how they train the civilian 
counterparts to issue a license where in return, you actually--
I mean, last year, the DoD spent roughly almost a billion 
dollars in unemployment benefits. I mean, you have the DoD 
spending hundreds of thousands of dollars to training 
servicemembers only to come out and the servicemember has to go 
and get retrained again, spending additional taxpayers' 
dollars.
    In this economic environment, I am pretty sure we can 
minimize that usage of taxpayers' dollars and actually have the 
servicemember be contributing back to the economy and 
strengthening America's economy.
    So these are some of the things that The American Legion 
has taken up, not just legislation, but also--and as far as the 
state level goes, we are in contact with the National Governors 
Association, so we can work with State Government Association 
to hopefully present state legislation that will also address 
some of these issues. And this is pretty much the next step 
that The American Legion has taken.
    Mr. Braley. Thank you very much.
    Mr. Gonzalez. Thank you, sir.
    Mr. Stutzman. Thank you.
    Mr. Walz.
    Mr. Walz. I am good.
    Mr. Stutzman. Good?
    I have got just one quick follow-up question to Mr. Odom. 
Could you discuss the difficulties that banks would have 
ascertaining if the homeowner is deployed, if they are 
medically retired or have a hundred percent VA rating or a 
surviving spouse, how difficult is that for the banking 
industry?
    Mr. Odom. Right now they cannot. I mean, there is no 
searchable database whereby they, the banks, would be able to 
ascertain that. It simply cannot be done. That is the reason 
why it--my suggestion, sir, is if you want to provide these 
protections for these expanded groups, then it only seems to me 
to be fair to put the burden on these newly protected people to 
give notice to the financial institution when they claim credit 
for--when they claim protection as this newly expanded 
classification because there is no way for the banks to comply.
    They can search every known database known to mankind now 
and they would never find out that someone has a 100 percent 
disability rating. They would never find out that she or he is 
a surviving spouse of a service-connected death. It cannot 
happen.
    That is the big problem that I have with 5747. It is a 
great idea, but you cannot implement it as it is now. My 
experience as a litigator is if a judge or a jury sees a 
defendant who is being sued for noncompliance with something 
that they could not comply with, you are not going to win. You 
are just not going to get any damages for these people. So 
there I go talking about lawsuits again, but it is what I do, 
Mr. Chairman.
    But I am simply suggesting that I do not think, and I do 
not speak for the DMDC, I know those people, they are 
unbelievably technically capable, but these are databases that 
they do not have, and I do not think they can create and I do 
not think you want some of these names in that database.
    But be that as it may, I think you can change all of that 
and you can rectify the problem. If you expand it to these new 
areas, require those newly protected people to claim their 
rights by written notice and then you are going to get into the 
problem of, well, who do I give that notice to.
    I send my payment to a payment center in Flagstaff, Arizona 
and my mortgage is part of a tranche that has $200 million 
worth that is held by Deutsche Bank in some offshore bank. I 
mean, you know, good grief. Who do you give the notice to 
because let me just predict that when somebody gives that 
notice and after the foreclosure takes place and I sue them, 
they are going to say we never got the notice. Gee whiz.
    You know, you cannot communicate with these folks. They are 
too big. And I do not mean to be hard on the financial services 
industry. I know they are trying and probably, you know, there 
are millions of mortgages out there and they do a good job on a 
lot of them. The only ones I see, however, are the horror 
stories where somebody has spent every minute of his or her 30 
minutes a week telephone time on hold with some customer 
service center in no name nowhere arguing with somebody who has 
never seen this act about whether or not they can or cannot 
proceed to foreclose on their home.
    We are able to stop a lot of them. Some of them we have 
not. But that is my problem, Mr. Chairman. 5747 puts an 
unworkable burden out there with no real solution that I can 
see.
    Mr. Stutzman. Okay. Thank you, sir.
    Mr. Braley, I think we are probably going to run out of 
time and instead of going to the third panel, I will just have 
the third panel submit their testimony for the record.
    Do you have any further questions for this panel?
    Mr. Braley. No.
    Mr. Stutzman. Okay. Well, thank you very much each of you 
for being here. We definitely appreciate your input and asked 
for your input.
    Mr. Odom, you have got a lot of experience with this and so 
any suggestions are welcome and we could definitely keep that 
under consideration because I think it is important that we do 
get this right. We want to make sure that we do not create 
another problem in lieu of trying to find the solution.
    So with that, thank you for your testimony and you all are 
dismissed.
    Actually, I will just close the hearing if there are no 
further questions. I thank each of you for being here.
    Yes. I would like to just recognize the third panel which 
was going to testify. Let's see. Let me make sure I get the 
right notes.
    Actually, our last panel would have been Mr. Mike Frueh, I 
believe. Is that how----
    Mr. Frueh. Frueh.
    Mr. Stutzman. Frueh from the VA and he is accompanied by 
Mr. John Brizzi.
    And, Mr. Brizzi, I was told that your family and your son 
has been dealing with some issues. I want to wish you the best 
and keep them in our thoughts and prayers. All of us have 
family and we all know the difficulties that we all have. Mr. 
Brizzi, thank you, and wish you all the best and hope all goes 
well.
    Also, we had Mr. Frederick Vollrath from the Department of 
Defense. Representing the Department of Labor's Veterans' 
Employment and Training Service is Mr. John Moran and he is 
accompanied by Ms. Gerri Fiala.
    So thank you for being here, and I apologize for the 
situation with votes, but we do have your testimony. And, 
again, always look for information from all interested parties 
with that. So thank each of the witnesses for being here today.
    Without objection, Members have five legislative days in 
which to revise and extend their remarks. Hearing no objection, 
so ordered.
    This hearing is adjourned.

    [The prepared statement of Mike Frueh appears in the 
Appendix]


    [The prepared statement of John K. Moran appears in the 
Appendix]


    [The prepared statement of Frederick E. Vollrath appears in 
the Appendix]


    [The prepared statement of Thomas E. Perez appears in the 
Appendix]

    [Whereupon, at 11:08 a.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

          Prepared Statement of Hon. Marlin Stutzman, Chairman
    Good morning. Today, we will take testimony on four bills; H.R. 
3860, The Help Veterans Return to Work Act, introduced by the Honorable 
John Garamendi, H.R. 4115, the HIRE at Home Act, Introduced by the 
Honorable Steve Stivers, H.R. 4740, the Fairness for Military 
Homeowners Act of 2012, introduced by the Honorable Duncan Hunter, and 
H.R. 5747, the Military Homes Protection Act, introduced by the 
Honorable Elijah Cummings.

                                 
              Prepared Statement of Hon. Bruce L. Braley, 
                       Ranking Democratic Member

    Thank you, Mr. Chairman, for holding this legislative hearing 
today.
    I know that the end of the second session is quickly approaching, 
so I am glad that we are taking this opportunity to review important 
legislation that will be beneficial to veterans.
    The bills included in today's hearing seek to improve employment 
opportunities for veterans and enhance protections under the 
Servicemembers Civil Relief Act. The four bills included in today's 
hearing will provide for employment and training, help veterans return 
to work, help veterans refinance their mortgage, and improve 
protections against foreclosures for veterans.
    I would also like to take this opportunity to congratulate Rep. 
Cummings for the inclusion of his bill, H.R. 5747, the Military Family 
Home Protection Act in the National Defense Authorization Act of 2013. 
This bill has been passed by the House of Representatives with 299 
votes in support.
    As you are aware the Committee Democratic staff and your staff 
worked closely through that process. I also would like to thank the 
Chairman of the Full Committee and his staff for including this 
important legislation in today's hearing. It's good to know we can work 
together in the spirit of bipartisanship to provide housing protections 
to servicemembers, veterans, and their families.
    Mr. Chairman since the end of the second session is fast 
approaching, I hope we can make the most of our time. Some other bills 
that I suggest we review include the Veterans Work Study Opportunities 
Act, The Ensuring Quality for Education Act, the Wounded Veteran Job 
Security Act, the REVAMP with Community Colleges Act, and the Military 
and Veterans Education Protection Act, as well as my Veterans' Job 
Corps Act.
    I do not expect us to agree on all bills but I would respectively 
recommend, Mr. Chairman, that we take the opportunity to review more 
bills at each of our legislative hearings. This in turn would give us 
more choices for legislative markups.
    Thank you Mr. Chairman and I yield back.

                                 
            Prepared Statement of Hon. Elijah E. Cummings, 
      Ranking Member, Committee on Oversight and Government Reform

    Thank you Chairman Stutzman, Ranking Member Braley, and Members of 
the Subcommittee for inviting me to testify today on H.R. 5747, the 
Military Family Home Protection Act.
    For the past several years, and particularly as Ranking Member of 
the House Oversight Committee, it has been my number one priority to 
help millions of American families who have been trying to protect 
their homes against foreclosure during the economic crisis that has 
gripped our nation. In my opinion, nobody is more deserving of our help 
than our military servicemembers fighting overseas.
    H.R. 5747 is a common-sense bill that would expand the 
Servicemembers Civil Relief Act (SCRA) to protect more of our brave men 
and women in uniform from losing their homes while they protect our 
freedoms abroad.
    This legislation is supported by the American Legion, Veterans of 
Foreign Wars, Paralyzed Veterans of America, Disabled American 
Veterans, and the Military Officers Association of America, all of whom 
have written letters of support. I respectfully ask that these letters 
be included in the record.
    In addition, this legislation has already been passed by the House 
as an amendment to the National Defense Authorization Act (NDAA) that I 
offered with Ranking Member Filner and Ranking Member Smith of the 
Armed Services Committee. It passed by an overwhelmingly bipartisan 
vote of 394-27, including the majority of Members on this Committee.
    Here is what the legislation would do. First, under current law, 
some home foreclosure protections for servicemembers are set to expire 
at the end of this year. My legislation would fix that by eliminating 
this sunset provision and ensuring that foreclosure protections are 
extended to 12 months. We need to act this year to make sure those 
protections do not expire.
    My legislation also would ensure that servicemembers serving in 
contingency operations, such as in Iraq and Afghanistan, do not have to 
worry about losing their homes, regardless of when they were purchased.
    In addition, it would extend foreclosure protections to the 
surviving spouses of servicemembers who are killed in the line of duty, 
as well as to veterans who are 100% disabled due to service-connected 
injuries at the time of discharge.
    Finally, the legislation would prohibit discrimination against 
servicemembers and their families who are covered by these protections, 
and it would double penalties to deter future violations.
    I crafted this legislation after more than a year of investigating 
cases in which military servicemembers and their families had suffered 
illegal foreclosures and inflated fees.
    For example, last July, I issued a staff report documenting these 
abuses entitled ``Fighting on the Home Front: The Growing Problem of 
Illegal Foreclosures Against U.S. Servicemembers.'' I ask that this 
report be included in the record.
    In addition, Senator Jay Rockefeller, the Chairman of the Senate 
Commerce Committee, joined me in co-hosting a congressional forum on 
this topic with a number of officials, including Holly Petraeus, the 
Director of the Office of Servicemember Affairs at the Consumer 
Financial Protection Bureau, who appeared alongside servicemembers and 
others to provide recommendations.
    I also want to extend my thanks to Ranking Member Braley, who 
participated in that bicameral forum, is an original co-sponsor to my 
legislation and has been integral to our efforts over the past year.
    The results of our investigation demonstrate the clear need for 
these improvements to the SCRA. Nobody fighting abroad to protect our 
country should also have to fight here at home just to keep a roof over 
the heads of their loved ones.
    I thank the members of this Committee for supporting my 
legislation, and even though it has passed the House as part of the 
NDAA, I ask my colleagues on both sides of the aisle to continue to 
work together to ensure that we enact these reforms into law.

                                 
               Prepared Statement of Hon. John Garamendi

    Chairman Stutzman, Ranking Member Braley, and Members of the House 
Veterans Affairs Committee Subcommittee on Economic Opportunity, thank 
you for the opportunity to testify on behalf of my bill, H.R. 3860, the 
Help Veterans Return to Work Act. It's an honor to be before you today.
    I represent the 10th District of California, home to Travis Air 
Force Base, the largest Air Mobility Command unit in the Air Force. 
Nearby in Marysville, California, is Beale Air Force Base, which is the 
leader in Intelligence, Surveillance and Reconnaissance (ISR) with 
major weapon systems including the U2, MC-12 and Global Hawk. Together, 
Travis and Beale employ nearly 16,000 servicemembers across active 
duty, National Guard, and the Reserves, and over 75,000 veterans live 
in my district and the surrounding area.
    My bill, the Help Veterans Return to Work Act, addresses a major 
problem not only in Northern California, but throughout the U.S. -the 
tragically high unemployment rate among veterans. Specifically, my bill 
seeks to increase the reemployment rate among veterans by amending the 
undue hardship provision under the Uniformed Services Employment and 
Reemployment Rights Act (USERRA). Currently, an employer is excused 
from reemploying a returning veteran if the employer's circumstances 
have changed in a way that it is now impossible or unreasonable to do 
so, or imposes an ``undue hardship.'' This undue hardship provision is 
too lenient in allowing employers to dismiss deployed servicemembers. 
As a reflection of this problem, the number of USERRA complaints and 
inquiries reported to the Employer Support of Guard and Reserve, a 
Department of Defense (DoD) agency, increased 164 percent between 2008 
and 2010. The Veterans Reemployment Act of 2012 amends USERRA so that 
undue hardship protections apply only to small businesses, eliminating 
the protections for large businesses.
    In May of 2012, the Bureau of Labor and Statistics Current 
Population Survey (BLS CPS) reported that the unemployment rate among 
all veterans is 7.7%, which is slightly below the national unemployment 
rate. This dynamic is consistent with historical trends. Traditionally, 
the veteran unemployment rate has been lower than that of nonveterans. 
Still, the fact that 7.7% of our veterans are unemployed is 
unacceptable for a Nation likes ours. However, this number, which 
represents the unemployment rate among all veterans, pales in 
comparison to the unemployment rate among veterans in the 18 to 24 
year-old age group, which is an alarming 23.5% -over 8% higher than the 
national unemployment rate for that age group (15.3%).
    VetJobs, a premier employment service for veterans and a witness 
before this Subcommittee in February 2012, has estimated that the 
unemployment rate for young veterans will increase even more as the DoD 
starts to furlough active duty troops and as many of the National Guard 
and Reserve brigades start to return from theatre.
    This unemployment gap must be closed, and as the body that made the 
decision to send these brave men and women to war, it's our 
responsibility to ensure that they can return home to a job that 
enables them to support themselves and their families in the same 
manner as they did prior to deployment. Amending the undue hardship 
protections under USERRA, which my bill seeks to do, will bring us one 
step closer to fulfilling our obligation to our veterans. Thank you, 
Mr. Chairman, I look forward to any questions your Subcommittee may 
have.

                                 
                Prepared Statement of Hon. Steve Stivers

    I want to thank Chairman Stutzman and Ranking Member Braley for 
holding this important legislative hearing today on my legislation, the 
Helping Iraq and Afghanistan Veterans Return to Employment (HIRE) at 
Home Act. Also, I would like to thank my lead Democrat co-sponsor 
Representative Tim Walz of Minnesota for tackling this important issue 
with me.
    The measure before the Committee today is designed to improve 
cooperation between the military and state agencies to more closely 
align specialized military training and state licensing and 
certification requirements.
    The legislation came from an idea shared by a group of local 
veterans at a roundtable I held in my District in Columbus, Ohio. I am 
grateful to that group of local veterans for bringing this problem to 
my attention--including three young veterans Angela King, Dustin Crum 
and David Warnock. With the number of veterans returning from Iraq and 
Afghanistan, we need to make every effort to help our returning 
military transition back to jobs in their local communities.
    I have served over 26 years in the Ohio Army National Guard and 
have been honored to serve with so many brave men and women over the 
years. Our servicemembers and veterans have protected the United States 
at immense personal cost to themselves and their families -to defend 
our Nation and its ideals of democracy and freedom. They and their 
families deserve our respect and our gratitude, and we owe a debt to 
them for their service.
    As many of you know, unemployment among post-9/11 veterans is 12.7 
percent, according to a recent Bureau of Labor Statistics report. By 
allowing military training in a comparable field to count toward 
certification in the private sector, it will help get veterans back to 
work more quickly once they are back with their families.
    Specifically, the HIRE at Home Act would apply when a veteran is 
seeking State certifications or licenses to become a state-tested 
nursing assistant, EMT, certified nursing assistant, registered nurse 
or commercial truck driver. This legislation simply encourages states 
to consider our servicemembers' experience, which could allow them to 
skip expensive and time-consuming hurdles to employment.
    My legislation will not only help veterans be more competitive in 
the job market but also help them land better jobs. For example, an 
Army medic who administered medication to wounded soldiers and was 
responsible for their lives on the battlefield, could not be certified 
as an emergency medical technician (EMT) in our local communities 
without redundant schooling. This bill would make that transition much 
easier.
    It is encouraging that the Department of Defense (DoD) released a 
report identifying several education and training issues it hopes to 
resolve, including having military training pre-approved within state 
credentialing options.
    While serving our country, our military men and women perform high-
skilled jobs, often under intense and dangerous conditions. One of the 
best ways to honor their service would be to give them the opportunity 
to do the same job, without unnecessary and burdensome hurdles at home.
    Again, I appreciate the Chairman and Ranking Member for allowing me 
to testify today and holding this hearing.

                                 
                 Prepared Statement of Ryan M. Gallucci

    MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
    On behalf of the more than 2 million men and women of the Veterans 
of Foreign Wars of the U.S. (VFW) and our Auxiliaries, I would like to 
thank you for the opportunity to testify on today's pending 
legislation. With the conflict in Iraq drawing to a close, withdrawal 
from Afghanistan on the horizon, and proposals to scale back our 
nation's active duty military while continuing to lean on National 
Guard and Reserve personnel for future routine missions, the VFW 
believes discussing how to protect our servicemembers and veterans 
within the workforce and streamlining processes through which veterans 
can secure meaningful employment must remain a national imperative. 
Despite continuing efforts within the Federal government and across 
private industry, recent unemployment numbers for veterans of the 
current conflicts indicate that that we are not solving the problem. 
The VFW is encouraged to see that this Committee continues to take this 
situation seriously, and we are honored to share our thoughts on 
today's bills in an effort to protect our nation's heroes and offer 
them the career opportunities for which their military training and 
experience logically prepared them.
H.R. 3860, Help Veterans Return to Work Act:
    The VFW understands that the goal of this legislation is to ensure 
that large businesses can no longer claim ``undue hardship'' as a 
reason to shirk reemployment obligations under the Uniformed 
Servicemembers Employment and Reemployment Rights Act (USERRA). 
However, the VFW must oppose this bill, which we believe would make 
members of the National Guard and Reserve unattractive employees to 
large companies. This issue is truly a double-edged sword. The VFW 
wholly supports strong legal protections for members of the Guard and 
Reserve, but we understand that the relationship between our Reserve 
Component and civilian employers must be equitable for both parties. We 
feel the current provisions through which large businesses can claim 
undue hardship offers both the servicemember and the employer 
reasonable due process in resolving reemployment disputes.
    If we put so many legal constrictions on hiring members of the 
Reserve Component, our servicemembers will be perceived as a legal 
liability to potential employers, large and small. A recent report from 
the Center for a New American Security (CNAS) outlined the business 
case for hiring servicemembers and veterans. In the report, CNAS also 
ranked employer concerns for hiring current or former military 
personnel. One of the major concerns for employers included potential 
deployments and USERRA compliance. To the VFW this implies that the 
perception of USERRA among employers may actually prevent 
servicemembers and veterans from ever getting in the door.
    In light of this bill and other concerns over USERRA, we invite the 
Subcommittee to host a separate hearing or roundtable discussion on 
USERRA in the 21st Century to better understand how this law should be 
implemented and how we can best serve the interests of our Reserve 
Component servicemembers and the companies that employ them.
H.R. 4115, HIRE at HOME Act:
    The VFW fully supports the HIRE at HOME Act. Over the last few 
years, we have heard growing concerns that veterans who receive highly 
technical training in the military and amass years of practical work 
experience cannot receive state licenses and certifications without 
jumping through hoops when they return home. The VFW understands that 
states have a legal right to license professionals as they see fit 
within their borders. However, the VFW believes that states must have 
the ability to evaluate the training and experience of a veteran once 
they leave active duty. The HIRE at HOME Act will ensure that states 
critically evaluate military training when considering veterans for 
licensure in four key fields where we have seen high veteran 
unemployment: Certified nursing assistant, registered nurse, emergency 
medical technician, and truck driver.
    The VFW successfully pushed for a companion to the HIRE at HOME Act 
in the Senate, with some minor changes, which we would like to see this 
Subcommittee also include in markup. The changes simply outlines how 
states should report the ways in which they considered military 
training and experience toward state licensing requirements. 
Specifically, states would report to the Department of Labor at a 
minimum: The state standard for licensure in each field; the specific 
military training components evaluated for licensure; and any gaps in 
training that prohibit veterans from licensure. The Department of Labor 
would then establish protocols to share this information with the 
Department of Defense in an effort to close training gaps.
    The VFW believes this bill is a responsible first step in ensuring 
veterans can transition seamlessly into careers that the military has 
diligently prepared them for, while preserving each state's right to 
license professionals who choose to operate within their borders. 
Moving forward, this concept could prove helpful in closing the 
credentialing and licensing gap for other critical military 
occupational specialties (MOSs) without placing unnecessary burdens on 
states. We encourage the Subcommittee to move quickly on this critical 
bill, passing a comprehensive piece of legislation that reflects the 
VFW's recommendations and helps to close the military credentialing 
gap.

H.R. 4740, Fairness for Military Homeowners Act of 2012:
    The VFW supports this bill and we believe it is a responsible 
course of action offering financial relief for military home owners who 
are forced to frequently change duty stations. Unlike traditional home 
owners, military home owners must regularly change duty stations. In 
the past, military home owners could easily sell or rent their 
properties whenever they needed to move. This all changed when the 
housing bubble burst in 2008. This bill would offer relief to military 
families by allowing military home owners to refinance the mortgage on 
homes at their old duty stations as if the home was still a primary 
residence. Home owners who seek to refinance will encounter higher 
interest rates if they do not actively live at the property. This bill 
would ensure that military home owners can still lock in reasonable 
interest rates when they are forced to leave a home at their old duty 
station. This is a common sense approach that will offer reasonable 
relief to military home owners who must balance family obligations with 
the rigors of military life.

H.R. 5747, Military Family Home Protection Act:
    The VFW strongly supports this bill, which seeks to end predatory 
foreclosures on military families whose loved ones are deployed, 
permanent and total disabled, or who lost their lives in the line of 
duty. Over the last few years, we have heard horror stories about 
companies foreclosing on military home owners while servicemembers are 
deployed overseas. This bill seeks to end this unconscionable practice 
by affording specific protections for deployed servicemembers, disabled 
veterans, and surviving spouses. This bill even goes so far as to 
establish criminal penalties for persons who knowingly violate these 
new provisions under the Servicemembers Civil Relief Act, or SCRA. 
Never again should a military family worry that the bank will seize 
their home while their loved one is serving overseas or after their 
loved one has made the ultimate sacrifice. Military home owners face 
unique circumstances, and deserve these kinds of reasonable 
accommodations. We hope the Committee will move quickly on this bill.
    Mr. Chairman, this concludes my testimony and I would be happy to 
answer any questions you may have.
 Information Required by Rule XI2(g)(4) of the House of Representatives
    Pursuant to Rule XI2(g)(4) of the House of Representatives, VFW has 
not received any Federal grants in Fiscal Year 2012, nor has it 
received any Federal grants in the two previous Fiscal Years.

                                 
              Prepared Statement of Hon. Steve L. Gonzalez

    Chairman Stutzman, Ranking Member Braley and distinguished Members 
of the Subcommittee:
    Thank you for this opportunity to present The American Legion's 
views on the several pieces of legislation being considered by the 
Subcommittee today. The American Legion commends the Subcommittee for 
holding a hearing to discuss these very important and timely issues.
    Chairman Stutzman, Ranking Member Braley and distinguished Members 
of the Subcommittee:
    On behalf of the 2.4 million members of The American Legion I thank 
you for this opportunity to submit The American Legion's views on the 
legislation being considered by the Subcommittee today. We appreciate 
the efforts of this Subcommittee to address the different needs of the 
men and women who are currently serving and those who served during 
past conflicts.
             H.R. 5747: Military Family Home Protection Act
    Amends the Servicemembers Civil Relief Act (SCRA) to improve the 
protections for servicemembers against mortgage foreclosures, and for 
other purposes.
    While servicemembers fight overseas, another war has been brewing 
back home: foreclosures. Since the 2006 collapse of the real estate 
market, tens of thousands of military servicemembers have lost their 
homes to foreclosure. History has shown even those putting their lives 
on the line for their country may not be safe from foreclosure. America 
simply cannot afford to have our men and women in Iraq, Afghanistan, or 
elsewhere distracted by concerns over whether someone is seeking a 
default judgment against them back home, or evicting their spouse and 
children, or selling their house at an auction sale. H.R. 5747, 
Military Family Home Protection Act, would provide mortgage protection 
for members of the armed services, surviving spouses and certain 
veterans. This legislation would expand the statute covering 
servicemembers that are part of a ``contingency operation'', that is, 
anyone who is or could become involved in military actions, are called 
up to or retained in active-duty service.
    Additionally, H.R. 5747 would expand SCRA to cover any veteran who 
is totally disabled, regardless of when his or her obligation arose, 
and surviving spouses of servicemembers who died in service, regardless 
of obligation of service. It would also expand the period covered to 
include any proceeding filed within 12 months of the servicemember's 
military service, and apply protections for veterans and surviving 
spouses with regard to any action filed within 12 months of the 
servicemember's retirement or death.
    In the past, military servicemembers and their families have been 
foreclosed upon illegally. Whether or not this has been due to 
carelessness or callousness neither is acceptable. H.R. 5747, Military 
Family Home Protection Act, seeks to strengthen the law to ensure that 
America's servicemembers have ample time to handle financial matters, 
while transitioning from their active-duty service.
The American Legion supports this bill.
              H.R. 3860: Help Veterans Return to Work Act
    Amends title 38, United States Code, to clarify the 
responsibilities of small businesses with respect to the employment and 
reemployment rights of veterans.
    H.R. 3860 closes a loophole that allows larger corporations to 
refrain from rehiring National Guard and Reserve members who were sent 
into combat in service of our country. Current law, as set by the 
Uniformed Services Employment and Reemployment Rights Act of 1994 
(USERRA), is too lenient in allowing employers, regardless of size, to 
dismiss deployed servicemembers. It is estimated that nearly half of 
unemployed veterans are National Guard and Reserve members. This bill 
would help ensure that those who leave behind jobs to defend our Nation 
will be guaranteed those jobs when they return home.
    Currently, an employer is excused from reemploying a returning 
veteran if the employer's circumstances have changed in a way that it 
is now impossible or unreasonable to do so, or imposes an ``undue 
hardship.'' The Help Veterans Return to Work Act of 2012 would amend 
USERRA so that undue hardship protections would apply only to small 
businesses, eliminating the protections for large businesses.
The American Legion supports this bill.
        H.R. 4740: Fairness for Military Homeowners Act of 2012
    Amends the Servicemembers Civil Relief Act (SCRA) to ensure that 
relocation of a servicemember to serve on active duty away from the 
servicemembers' principal residence does not prevent the servicemembers 
from refinancing a mortgage on that principal residence.
    Military service often requires relocation due to the nature of the 
profession. America's servicemembers should be able to expect equal 
treatment as any other American homeowner when refinancing their 
mortgages. Currently, active-duty military servicemembers cannot 
refinance their homes if the home is not owner-occupied by the 
servicemember.
    H.R. 4740, Fairness for Military Homeowners Act of 2012, would 
amend section 303, title 50, of the United States Code (USC) by adding 
section 303A, which would allow servicemembers who are unable to reside 
in a residence where they are the mortgagor due to military service. 
This legislation would allow them to apply for a mortgage refinance, 
regardless of their residency status. However, H.R. 4740, Fairness for 
Military Homeowners Act of 2012, does include provisions which limit 
the ability of a servicemember to refinance a mortgage if they have 
refinanced within the preceding 5 year period.
The American Legion supports this bill.

 H.R. 4115: Helping Iraq and Afghanistan Veterans Return to Employment 
                              at Home Act

    Requires states to align their certification for nursing assistant, 
certified nursing assistant, registered nurse, or commercial driver's 
license with military training standards.
    In early 1996, The American Legion launched the first 
groundbreaking credentialing report to study those vocational skills 
for which the armed services provide training and for which a license 
of certificate is required to work in this field in the civilian 
economy. The education, training and experience obtained during an 
individual's military service not only provides tangible benefits for 
the nation's defense, but can also contribute significantly to a highly 
skilled civilian workforce. The military invests millions of dollars 
training its uniformed personnel, providing a broad base of knowledge 
and experiences that can carry over to civilian occupations. However, 
transitioning from military occupations to civilian jobs can present 
significant challenges for servicemembers.
    These servicemembers and veterans have attended some of the finest 
technical and professional training schools in the world. These 
military men and women are graduates with experience in health care, 
electronics, computers, engineering, drafting, air traffic control, 
nuclear power plant operations, mechanics, carpentry, and many other 
fields. Many of their skills require some type of license or 
certificate to find a career in the civilian workforce. In many cases, 
this license or certificate requires schooling which has already been 
completed by attendance at an armed forces training institution. 
Unfortunately, the agencies which issue the license or certificate do 
not recognize the training or experience already completed. For 
example, a medic who treated gunshot wounds on the battlefields of 
Afghanistan will not be certified as an emergency medical technician 
(EMT) in our nation's cities without additional redundant schooling.
    When civilian credentialing boards, states, and employers fail to 
fully recognize military education, training and experience, both the 
servicemember and the Nation are impaired. The veteran faces reduced 
chances of obtaining a job on par with his/her skills, and the civilian 
workforce cannot take full advantage of the extensive skills training 
in which our Nation has invested.
    H.R. 4115: Helping Iraq and Afghanistan Veterans Return to 
Employment at Home Act, would establish as a condition for certain 
Federal funds to be disbursed to states. It would require that states 
take military training into consideration for certification or 
licensure for State tested nursing assistant or a certified nursing 
assistant, registered nurse, emergency medical technician and 
commercial driver's license.
    The American Legion applauds Representative Steve Stivers (OH) and 
Tim Walz (MN) for their leadership and efforts to tackle and address 
this issue. This Committee should also be aware of additional 
legislation, as well as other actions members of Congress have 
undertaken which will help this problem. There are as follows:

      Representatives Jeff Denham (CA) and Walz (MN) H.R. 4155, 
Veteran Skills Work Act, which will streamline the credentialing access 
for servicemembers and remove the bureaucracies from it, allowing 
relevant military training to become equivalent to Federal licensing 
and certification requirements.
      Representative Joe Walsh (IL) included an amendment to 
the FY 2013 National Defense Authorization Bill regarding 
credentialing. This amendment would modify the previous pilot program 
by striking more than five military occupational specialties (MOS); 
therefore, allowing the Department of Defense to expand the amount of 
MOS's the pilot programs can study.

    The American Legion will continue to lead on this front and will 
make every effort to assist and enhance them where possible.
The American Legion supports this bill.
    The American Legion appreciates the opportunity to comment on the 
bills being considered by the Subcommittee. I would be happy to answer 
any questions you might have. Thank you.

    Executive Summary:

    The American Legion supports H.R. 5747: Military Family Home 
Protection. The American Legion believes servicemembers should not be 
distracted in Iraq, Afghanistan, or elsewhere by concerns over whether 
someone is seeking a default judgment against them back home, or 
evicting their spouse and children, or selling their house at an 
auction sale. This legislation would expand the statute covering 
servicemembers that are part of a ``contingency operation'', that is, 
anyone who is or could become involved in military actions, are called 
up to or retained in active-duty service.
    The American Legion supports H.R. 3860, Help Veterans Return to 
Work Act. The American Legion believes current law, as set by the 
Uniformed Services Employment and Reemployment Rights Act of 1994 
(USERRA), is too lenient in allowing employers, regardless of size, to 
dismiss deployed servicemembers. The Help Veterans Return to Work Act 
of 2012 would amend USERRA so that undue hardship protections would 
apply only to small businesses, eliminating the protections for large 
businesses.
    The American Legion supports H.R. 4740, Fairness for Military 
Homeowners Act of 2012. The American Legion believes America's 
servicemembers should be able to expect equal treatment as any other 
American homeowner when refinancing their mortgages. H.R. 4740 ensures 
that servicemembers are treated equal, as well as allow servicemembers 
who are unable to reside in a residence where they are the mortgagor 
due to military service. This legislation would allow them to apply for 
a mortgage refinance, regardless of their residency status.
    The American Legion supports H.R. 4115, Helping Iraq Afghanistan 
Veterans Return to Employment at Home Act. The American Legion believes 
servicemembers and veterans have attended some of the finest technical 
and professional training schools in the world. Many of their skills 
require some type of license or certificate to find a career in the 
civilian workforce. In many cases, this license or certificate requires 
schooling which has already been completed by attendance at an armed 
forces training institution. Unfortunately, the agencies which issue 
the license or certificate do not recognize the training or experience 
already completed. H.R. 4115: Helping Iraq and Afghanistan Veterans 
Return to Employment at Home Act, would establish as a condition for 
certain Federal funds to be disbursed to states. It would require that 
states take military training into consideration for certification or 
licensure for State tested nursing assistant or a certified nursing 
assistant, registered nurse, emergency medical technician and 
commercial driver's license.

                                 
 Prepared Statement of Major General Andrew ``Drew'' Davis, USMC (Ret)

INTRODUCTION

    Mr. Chairman and members of the Subcommittee, the Reserve Officers 
Association (ROA) and the Reserve Enlisted Association (REA) would like 
to thank the Subcommittee for the opportunity to testify. ROA and REA 
applaud the ongoing efforts by Congress to address issues facing 
veterans and servicemembers such as employment challenges, problems 
within the home loan programs, SCRA and more.
    Though contingency operations in Afghanistan are being wound down, 
currently there are still high levels of mobilizations and deployments 
for Reserve and Guard members, and many of these outstanding citizen 
soldiers, sailors, airmen, Marines, and Coast Guardsmen have put their 
civilian careers on hold while they serve their country in harm's way. 
As we have learned, they share the same risks as their counterparts on 
the battlefield in the Active Components. Over 848,000 Reserve and 
Guard servicemembers have been activated since September 11. Of these 
more than 275,000 have been mobilized two or more times. The United 
States is creating a new generation of combat veterans that come from 
its Reserve Components (RC). It is important, therefore, that we do not 
squander this valuable resource of experience, nor ignore the benefits 
that they are entitled to because of their selfless service to their 
country.
    Unfortunately, unemployment continues to run about 10 percent 
higher for younger Reserve and Guard members than for non-affiliated 
veterans. ROA and REA would like to work with this Committee to develop 
solutions that would focus on this age group.
Reserve Association's Agenda Summary
    Employer Support:

      Continue to enact tax credits for health care and 
differential pay expenses for deployed Reserve Component employees.
      Provide tax credits to offset costs for temporary 
replacements of deployed Reserve Component employees.
      Support tax credits to employers who hire servicemembers 
who supported contingency operations.

    Employee Support:

      Permit delays or exemptions while mobilized of regularly 
scheduled mandatory continuing education and licensing /certification/
promotion exams.
      Continue to support a law center dedicated to USERRA/SCRA 
problems of deployed Active and Reserve servicemembers.

    Uniformed Services Employment and Reemployment Rights Act (USERRA) 
/ Servicemembers' Civil Relief Act (SCRA):

      Improve SCRA protections for deployed members from 
creditors that willfully violate SCRA.
      Fix USERRA/SCRA to protect health care coverage of 
returning servicemembers and family for pre-existing conditions, and 
continuation of prior group or individual insurance.
      Enact USERRA protections for employees who require 
regularly-scheduled, mandatory continuing education and licensing/
certification and make necessary changes to USERRA to strengthen 
employment and reemployment protections.
      Exempt Reserve Component members from Federal law 
enforcement retirement application age restrictions when deployment 
interferes in completing the application to buy back retirement 
eligibility.
      Amend SCRA to prohibit courts from modifying previous 
judgments that change the custody arrangements for a child of a 
deployed servicemember.
      Encourage Federal agencies to abide by USERRA/SCRA 
standards.
      Ensure that USERRA is not superseded by binding 
arbitration agreements between employers and Reserve Component members.
      Make the states employers waive 11th Amendment immunity 
with respect to USERRA claims, as a condition of receipt of Federal 
assistance.
Amendments to Title 38 about Employment
    Notwithstanding the protections and antidiscrimination laws in 
effect for veterans and serving members, it is not unusual for members 
to lose their jobs due to time spent away while deployed. Sometimes 
employers are going out of business, but more often it is because it 
costs employers money, time, and effort to reintroduce the employee to 
the company.
    ROA and REA support the passages of HR.3860 and HR.4115, which 
would improve the efficiencies of veteran's employment and training 
under Title 38 U.S.C.

    Small Business hiring of Reserve and Guard members

    Deployment of Reserve and Guard members has the hardest impact on 
small businesses. Such businesses are the backbone of the American 
economy, and are expected to do the majority of the hiring in the near 
future. The Small Business Administration defines a small business 
(depending on the industry) as a business with fewer than 500 
employees. A micro-business is defined as having fewer than 10 
employees.
    ROA supports initiatives to provide small business owners with 
protections for their businesses while a Reserve Component employee is 
on deployment. Employer care plans should be developed in a way that 
will assist with mitigation strategies for dealing with the civilian 
workload during the absence of the servicemember employee and lay out 
how the employer and employee would remain in contact throughout the 
deployment.
    H.R.3860: Help Veterans Return to Work Act, as introduced by Reps. 
John Garamendi (Calif.) and Bobby Rush (Illinois) amends USERRA to 
better define which businesses can claim hardship if unable to rehire a 
Reserve Component member. If this amendment is enacted, only ``small 
business concerns'' would be able to take advantage of this affirmative 
defense.
    It is important to note that the ``undue hardship'' defense only 
applies to a small minority of reemployment claims. This mainly applies 
to those servicemembers who have disabilities that were incurred or 
aggravated during uniformed service, and after reasonable efforts by 
the employer to accommodate the disability, is not qualified due to 
such disability to be employed in the position of employment. The 
employer must also make every effort to place the veteran into another 
position within that company.

    Recognition of Active Duty experience for civilian employment

    There is an ongoing challenge on how to convert military skill sets 
into credited experience that would be recognized by civilian employers 
and provide longevity credit during a licensing or credentialing 
process. Cross-licensing/credentialing would ease the burden of having 
to acquire new licenses/credentials in the private sector after having 
gained experience to perform such duties during military service.
    ROA and REA encourage the implementation of certifications or a 
form that would inform employers of skills potential veteran and 
servicemember employees gained through their military service.
    H.R.4115: the HIRE at HOME Act, as introduced by Reps. Steve 
Stivers (Ohio) and Tim Walz (Minn.) codifies the need to credit any 
such military training as one of the program functions of the Assistant 
Secretary of Labor for Veterans' Employment and Training. Subparagraph 
(9)(B) also describes certain military skills, and provides a location 
to include additional skills in the future as they are identified.
Servicemembers Civil Relief Act - Home Mortgages
    ROA and REA support the passage of H.R.4740, which would improve 
the veteran's mortgage protections under the SCRA.
    Currently, under the SCRA, members of the Armed Forces are granted 
nine months of protection from non-judicial mortgage foreclosure after 
returning home from Active Duty. This temporary moratorium on civil 
action allows servicemembers to return home and re-adjust to civilian 
life while at the same time pooling their funds to repay debts such as 
mortgages. But protections are also needed while individuals are away 
from ``home of record,'' as well. Often, serving members want to retain 
homes as a place of retirement, but are required to relocate on new 
military assignments.
    H.R.4740: Fairness for Military Homeowners Act of 2012, as 
introduced by Rep. Duncan Hunter (Calif.) protects serving members from 
being denied refinancing should they no longer reside in the premises 
because of a relocation caused by permanent change of station (PCS) or 
a deployment of 18 months or longer. ROA supports this change to 
legislation because it affects Full Time (AGR or FTS) Reserve or Guard 
members as well as Active Duty servicemembers.
    A risk of refinancing is that the mortgage may lose its protections 
under SCRA, by becoming a new obligation, rather than one existing 
prior to military service.
    The group that is excluded under this H.R.4740 would be drilling 
Reserve or Guard members. For over five years, the Department of 
Defense policy has been that the duration of involuntary mobilization 
would be no longer than 12 months.
    This bill would apply to those individual Reserve and Guard members 
who volunteer for periods longer than 12 months. PCS orders would also 
apply, as the Department of the Army has tried to use PCS orders for 
Reservists who are mobilized longer than 179 days. Volunteers can serve 
up to three years, but often this is accomplished through a series of 
annual orders.
    H.R.5747: the Military Family Home Protection Act, introduced by 
Rep. Elijah Cummings (Md.) while noble in intent; has some 
inconsistencies on the mortgaged property it covers:

    1. As in current US Code, the Active or Reserve servicemember has 
mortgage protection only for property obligations contracted prior to 
military service. However,
    2. An Active member serving in support of a contingency operation 
gains additional protection for properties that are mortgaged at the 
time of mobilization or deployment.
    3. Veterans are limited to Chapter 61 retirees who were separated 
from active duty with a 100 percent disability as determined by the 
secretary of veteran affairs. They are covered for any mortgage 
obligation in effect 12 months prior to their retirement.
    4. A surviving spouse is covered for any mortgage obligation in 
effect 12 months prior to the death of a servicemember.

    ROA is concerned that . . .

    1. A servicemember, if relocated by the service may pay off 
original property obligations, but also acquire new mortgage 
responsibilities because of service transfers. The SCRA clock would 
only be restarted if the active duty individual is deployed to a 
contingency operation, but not if the individual has other mission 
assignments.
    a. This bill does not consider remote hardship tours, such as the 
Marines in Okinawa, or soldiers stationed on the DMZ in Korea.

    2. The bill states that the Chapter 61 retiree must be 100 percent 
service disabled at the time of retirement, yet many individuals are 
underrated by Physical Evaluation Boards. Adjustments to claims made by 
Veterans Affairs (VA) can take up to a year to be processed, putting a 
Chapter 61 veteran who is actually 100 percent disabled at a financial 
disadvantage.
    a. Further, a Chapter 61 retiree is anyone who was medically 
retired from military service with a 30 percent or greater VA rated 
disability. There are individuals who are medically retired with less 
than a 30 percent rating, who receive a separation payment rather than 
a retirement, and then there are individuals who receive regular 
retirement and also receive disabilities. Disabilities can cascade, and 
veterans from various categories can become 100 percent disabled after 
initial ratings. Is this an adequate definition for discharged veterans 
who become 100 percent disabled?

    3. A surviving spouse qualifies following the death of a 
servicemember under this legislation. This does not address whether 
this death is in the ``line of duty, or a spouse who may become a 
survivor by complications of ``line of duty'' wounds or injuries.

    One additional group that may have been overlooked is spouses who 
are caretakers for wounded warriors. This would disrupt family income 
and have a negative effect on financial obligations.
    ROA and REA have no objection to extending protection from 9 to 12 
months, but H.R.5747 needs to be reworded to accomplish what is 
intended.
Reducing Reserve Component Unemployment
    Employers view USERRA as a negative incentive and would like to see 
positive encouragement to hire veterans. The VOW to Hire Heroes Act was 
a first good step, but does not address the problems faced by Reserve 
and Guard members. For younger Reserve and Guard members unemployment 
continues to run at about 10 percent higher than non-affiliated 
veterans. For the most part those between 18 to 26 years old are from 
the Reserve Component.
    After 10 years of war, employers are more comfortable hiring 
unaffiliated veterans, than those who could be recalled to active duty, 
and with a future risk of an operational call-up once every five years. 
It is just easier not to hire Reserve and Guard members.
    While this may be a violation of the USERRA, stealth discrimination 
can easily occur if you do not tell the Reserve Component veteran that 
their military career is why they were not hired. Additional positive 
incentives are needed for this group of veterans.
    Incentives of various types would serve to mitigate burdens and 
encourage businesses to both hire and retain Reservists and veterans. 
Examples include providing employers - especially small businesses - 
with incentives such as cash stipends to help pay for health care for 
Reservists up to the amount DoD is contributing. Small businesses are 
more likely to hire Guard and Reserve veterans if they could afford to 
hire temporary replacements. A variety of tax credits could be enacted 
to provide such credit at the beginning of a period of mobilization or 
perhaps even a direct subsidy for costs related to a mobilization such 
as the hiring and training of new employees.
Conclusion
    ROA and REA appreciate the opportunity to submit testimony. ROA and 
REA look forward to working with the Subcommittee on Economic 
Opportunity and the House Veterans' Affairs Committee on solutions to 
these and other issues. We hope in the future for an opportunity to 
discuss these issues in person with Committee members and their staff.

    *****

    The Reserve Officers Association of the United States (ROA) is a 
professional association of commissioned and warrant officers of our 
nation's seven uniformed services and their spouses. ROA was founded in 
1922 during the drawdown years following the end of World War I. It was 
formed as a permanent institution dedicated to National Defense, with a 
goal to teach America about the dangers of unpreparedness. When 
chartered by Congress in 1950, the act established the objective of ROA 
to: ``...support and promote the development and execution of a 
military policy for the United States that will provide adequate 
National Security.''
    The Association's 57,000 members include Reserve and Guard 
Soldiers, Sailors, Marines, Airmen, and Coast Guardsmen who frequently 
serve on Active Duty to meet critical needs of the uniformed services 
and their families. ROA's membership also includes commissioned 
officers from the U.S. Public Health Service and the National Oceanic 
and Atmospheric Administration who often are first responders during 
national disasters and help prepare for homeland security.
    ROA is a member of The Military Coalition where it co-chairs the 
Guard and Reserve Committee. ROA is also a member of the National 
Military/Veterans Alliance and the Associations for America's Defense. 
Overall, ROA works with 75 military, veterans, and family support 
organizations.

    President: Col. Walker Williams, USAF (Ret.)
    202-646-7706

    Staff Contacts:
    Executive Director:
    Major General Andrew ``Drew'' Davis, USMC (Ret.)
    202-646-7706

    Legislative Director:
    CAPT Marshall Hanson, USNR (Ret.)
    202-646-7713

    Air Force Director:
    Col. Bill Leake, USAFR
    202-646-7713

    Army and Strategic Defense Education Director:
    Mr. ``Bob'' Feidler
    202-646-7717

    USNR, USMCR, USCGR:
    CAPT Marshall Hanson, USNR (Ret.)
    202-646-7713

    Service Members' Law Center Director:
    CAPT Sam Wright, JAGC, USN (Ret.)
    202-646-7730

    The Reserve Enlisted Association is an advocate for the enlisted 
men and women of the United States Military Reserve Components in 
support of National Security and Homeland Defense, with emphasis on the 
readiness, training, and quality of life issues affecting their welfare 
and that of their families and survivors. REA is the only joint Reserve 
association representing enlisted reservists - all ranks from all five 
branches of the military.

    Executive Director
    CMSgt Lani Burnett, USAF (Ret)
    202-646-7715

    DISCLOSURE OF FEDERAL GRANTS OR CONTRACTS

    The Reserve Officers and Reserve Enlisted Associations are member-
supported organizations. Neither ROA nor REA have received grants, 
subgrants, contracts, or subcontracts from the Federal government in 
the past three years. All other activities and services of the 
associations are accomplished free of any direct Federal funding.

                                 
             Prepared Statement of John S. Odom, Jr., Esq.

    Chairman Stutzman, Ranking Member Braley and members of the 
Subcommittee. My name is John S. Odom, Jr., and I am an attorney from 
Shreveport, Louisiana. I am also a retired Air Force judge advocate and 
served over 31 years of combined active and Reserve duty. I was 
recalled to active duty from retirement during 2010 to author a report 
to Congress for the Department of Defense concerning certain matters 
related to proposed amendments to the Servicemembers Civil Relief Act. 
The vast majority of my civilian law practice is involved with 
representing servicemembers in claims they have against banks and other 
lending institutions who have violated their rights under the SCRA. In 
2011, I was lead counsel for Sgt James Hurley, formerly of the Michigan 
Army National Guard, in a suit against his mortgage servicing company, 
in what is believed to have been the first Federal jury trial involving 
claims under the SCRA in the history of the Act. I am a frequent 
lecturer at all of the service judge advocate schools and speak to 
judges' associations and both industry and consumer groups around the 
country on matters related to the SCRA. From 2006 to 2009, I served on 
the American Bar Association Standing Committee on Legal Assistance to 
Military Personnel and am the author of A Judge's Benchbook for the 
Servicemembers Civil Relief Act, published by the ABA in 2011.
    I am grateful for the invitation to appear today and offer comments 
and observations on H.R. 4740 and H.R. 5747. At the outset, let me 
express my appreciation to this Subcommittee and the entire House 
Committee on Veterans' Affairs for following the established 
legislative process to consider proposed amendments to the SCRA: 
Subcommittee hearings followed by mark-up sessions and full Committee 
consideration. In each of the past several sessions of Congress--
including this one--efforts have been made in the House version of the 
National Defense Authorization Act to amend the SCRA. In my opinion, 
including proposed amendments in that vast piece of legislation, 
bypassing the Subcommittee and Committee hearing process during which 
the views of experts and practitioners in the field of SCRA litigation 
can be heard and considered, does not produce the best legislation our 
servicemembers, veterans and their families deserve.
    Turning first to H.R. 4740, I fully support the concept that a 
servicemember should be able to refinance a home during a period of 
active duty even though they may not be residing in the residence as a 
result of military orders. I understand from legal assistance attorneys 
who consult with me frequently on a variety of SCRA-related topics that 
certain mortgage companies take the policy position that a mortgagor 
may only refinance the home if he or she currently resides in the home. 
Obviously, if the absence from the home is solely as a result of 
military orders (regardless of whether it is a mobilized Reserve or 
Guard member who is deployed or stationed at a duty location away from 
the residence or an active duty member who has complied with permanent 
change of station orders and has been unable to sell their home at the 
former duty location), such a policy is manifestly unfair to 
servicemembers. While H.R. 4740 would legislatively prevent such a 
policy, the legislation as currently drafted that will trigger the 
dreaded law of unintended consequences.
    The Act protects pre-service mortgages from nonjudicial foreclosure 
in the 27 states that allow nonjudicial foreclosures. Under H.R. 4740 
as drafted, a re-financing of a mortgage while a servicemember is on 
active duty would cause the servicemember to lose the protections of 
Section 303, since the new mortgage would no longer be a pre-service 
obligation. I suggest that additional language needs to be added to 
H.R. 4740 to provide that any refinancing accomplished pursuant to this 
section would not alter the status of the mortgage as a pre-service 
obligation (even though the original debt is being extinguished and 
refinanced) so that the protection from nonjudicial foreclosure would 
still be in effect for the servicemember. That is a vital protection, 
especially for personnel who are deployed and may have no idea about 
what is happening with their homes.
    As a final comment on H.R. 4740, I also question why section 
(b)(1)(B) of the proposed amendment requires that a deployment be for a 
period of not less than 18 months to qualify for protection. Many of 
our Reserve and Guard units and some Marine Corps units deploy for 
periods of less than 18 months. The period of deployment currently 
provided for lease cancellation protection under Section 305 of the 
SCRA (50 U.S.C. App. Sec. 535(b)(1)(B)) is ``not less than 90 days'' 
and I would recommend the same period be used in H.R. 4740. Whenever 
Congress establishes a different time period to trigger benefits under 
the SCRA, it ramps up compliance complexity for the industry and makes 
it more confusing for servicemembers.
    Turning to H.R. 5747, while the goals of this proposed amendment 
are truly laudable, it represents a significant expansion in SCRA 
protection and should be evaluated very closely for two reasons: first, 
with regard to mortgage foreclosures, this amendment cannot be 
realistically implemented as drafted; and secondly, it really does not 
fully accomplish what the drafters are trying to do.
    I agree completely with Congressman Cummings and the bill's co-
sponsors that the home of any servicemember who is deployed should 
never be subject to foreclosure, judicial or nonjudicial, and 
regardless of when the mortgage was incurred. There are simply too many 
factors that cannot be anticipated when a servicemember deploys and 
communication is too difficult from war zones for banks and mortgage 
companies to be seizing and selling servicemembers' homes while they 
are in harm's way.
    While we agree on that fundamental position, I am equally concerned 
that Congress not change current Section 303 of the SCRA (50 U.S.C. 
App. Sec. 533) which places the onus on creditors to ascertain the 
military status of mortgagors prior to nonjudicial foreclosure action. 
Under current Section 303, the servicemember is not required to give 
any notice to the mortgagee to receive the protections of the Act. The 
best way to accomplish the proposed expansion of SCRA mortgage 
foreclosure protections contemplated by H.R. 5747 is to insert a new 
Section 303A. into the Act.
    The deal killer with H.R. 5747 as drafted is simply this: there is 
no current database that would allow a foreclosing creditor to 
ascertain a servicemember's deployment status, ascertain that a wounded 
warrior had been medically retired, or identify a deceased 
servicemember's surviving spouse. Protection of all three of those 
classes of servicemembers and their families is certainly appropriate, 
but the absence of a searchable database will not allow that goal to be 
realistically achieved in a manner that is fair to both the 
servicemember and the industry. As a litigator, I can tell you that 
when judges and juries encounter requirements that cannot be met by the 
defendant, they are much less inclined to give the plaintiff any relief 
at all. Moreover, Section 303 (50 U.S.C. App. Sec. 533) only applies to 
nonjudicial mortgage foreclosures. It does not afford any protections 
whatsoever to those servicemembers (or their family members) who own 
homes or property in the 23 states which allow only judicial 
foreclosures.
    If the goal is to protect deployed servicemembers, wounded warriors 
and surviving spouses from foreclosure regardless of when their 
mortgages were incurred and regardless of where they reside, Congress 
should add a separate statutory provision to the SCRA that would do 
just that. Since no database exists that would allow creditors to 
identify these newly-added classes of protected individuals, requiring 
them to give the creditors notice of their status is a reasonable 
accommodation to the industry in exchange for these additional 
protections. I have drafted the outline of a suggested new section 
(Section 303A., 50 U.S.C. App. Sec. 533a.) which is included with my 
written remarks. It would accomplish the goals of H.R. 5747, provide 
foreclosure protections for all mortgages in all jurisdictions and 
avoid the pitfalls of changing current Section 303 (50 U.S.C. App. 
Sec. 533). I would be pleased to work with Committee and Member staffs 
in any way necessary to help put this suggested Section 303A. into 
appropriate form for either introduction as a stand-alone bill or as an 
amendment to H.R. 5747.
    As for the remaining provisions of H.R. 5747, I wholeheartedly 
endorse and recommend approval of each of those subsections. The sunset 
provision on extension of nonjudicial mortgage foreclosure protection 
needs to be eliminated, the addition of a prohibition against credit 
discrimination for persons who may become protected by the SCRA and the 
requirement for SCRA compliance officers for the banks are all well-
drafted and needed. I would only caution the Subcommittee that just 
because a person may be designated an SCRA compliance officer at a 
large bank does not mean he or she has the foggiest idea of what the 
SCRA is, or how a bank is supposed to comply with its provisions and 
protections. I would urge appropriate oversight for any SCRA compliance 
efforts imposed on the financial services industry, because in my past 
experience--to put it charitably--many of them know not of what they 
speak.
    I thank the Members for their attention to these critically 
important protections for our servicemembers and their families and 
would be pleased to respond to any questions you might have now or in 
the future.

                        Respectfully submitted,

                        John S. Odom, Jr.
                        Colonel, USAFR JAGC (ret.)

 Outline of an Amendment to the SCRA to Provide Protection of Deployed 
Servicemembers, Totally Disabled Servicemembers and Spouses of Deceased 
               Servicemembers from Mortgage Foreclosures
    1. Suggested title for new Section 303A (50 U.S.C. App. Sec. 533a):

    ``Protection of deployed servicemembers, totally disabled 
servicemembers and spouses of certain deceased servicemembers from 
mortgage foreclosure, both judicial and nonjudicial, regardless of when 
the obligation was incurred''

    2. Who would be protected:

    a. Deployed servicemembers;
    b. Totally disabled former servicemembers; and
    c. Surviving spouses of servicemembers whose death was service-
connected

    3. Where the appropriate definitions would be placed in the Act:

    All definitions would be included in Section 101 (``Definitions'') 
of the SCRA (50 U.S.C. App. Sec. 511).

    4. Nature of protection:

    If an obligor on a mortgage is a deployed servicemember, a disabled 
veteran, or a qualifying surviving spouse, in the event of a default in 
the obligation or mortgage and without regard to when the obligation 
was created, provided that the protected person (the deployed 
servicemember, disabled veteran or surviving spouse as defined in the 
Act) had given written notice to the mortgagee, trustee or other holder 
of the obligation of the protected person's status and documentation of 
the protected person's status was submitted to the obligee on the 
mortgage, no foreclosure action could be filed or completed in any 
court or nonjudicial foreclosure proceedings initiated during the 
protected period.

    5. Duration of protected period:

    a. For deployed servicemembers: duration of the deployment plus 12 
months;
    b. For wounded warriors: 12 months from classification as totally 
disabled;
    c. For surviving spouses: 12 months from death of spouse.

    6. Notice required to be given:

    The notice required to be given must be in writing and addressed to 
the same address as last payment made under the mortgage or other 
obligation. The Secretary of Defense would be designated to design and 
promulgate an official Department of Defense form that could be 
utilized to give such notice, although any written notice would suffice 
if it provided sufficient information to put the mortgagee or other 
creditor on notice of the protected person's status.

    7. When required notice must be given:

    a. For deployed personnel:
    The notice required to be given could be given up to 90 days prior 
to the deployment, at any time during the deployment or during the 
additional 12 month period following the deployment.
    b. For totally disabled veterans and surviving spouses, the notice 
required to be given could be given at any time during the 12 month 
protected period.

    8. Actions required by obligee on mortgage upon receipt of notice:

    Upon receipt of such written notice, any mortgagee, trustee or 
other creditor seeking to foreclose on property protected by the 
section would be required to immediately stay any judicial foreclosure 
proceeding until the expiration of the period of protection or to 
immediately halt any nonjudicial foreclosure proceedings that may have 
been initiated until the expiration of the period of protection.

                        Proposed by:

                        John S. Odom, Jr.
                        Colonel, USAFR JAGC (ret.)
                        Jones & Odom, L.L.P.
                        2124 Fairfield Avenue
                        Shreveport, Louisiana 71104
                        318-221-1600
                        [email protected]
 STATEMENT OF JOHN S. ODOM, JR. CONCERNING FEDERAL GRANTS OR CONTRACTS
    I certify that I have received no Federal grant or contract 
relevant to the subject matter of my 21 June 2012 testimony before the 
Economic Opportunity Subcommittee of the House Committee on Veterans' 
Affairs during the current or previous two fiscal years.
    Shreveport, Louisiana, this 18th day of June, 2012.

                        /signed/
                        John S. Odom, Jr.

                                 
                    Prepared Statement of Mike Frueh

    Mr. Chairman, Ranking Member Braley, and Members of the 
Subcommittee, I am pleased to provide the comments of the Department of 
Veterans Affairs (VA) on the legislation detailed below. Joining me 
today is John Brizzi, Deputy Assistant General Counsel.
    Certain bills under discussion today affect programs or laws 
administered by the Department of Labor, the Department of Defense 
(DoD), and the Department of Justice. Respectfully, we defer to those 
agencies' views with regard to the following bills: H.R. 3860 (limiting 
the availability of an undue hardship defense under the Uniformed 
Services Employment and Reemployment Rights Act to small businesses); 
H.R. 4115 (conditioning receipt of certain funds by a state on that 
state considering a Veteran's active-duty training in granting specific 
certificates); and H.R. 5747 (amending the Servicemembers Civil Relief 
Act (SCRA) to improve protections for Servicemembers against mortgage 
foreclosures).

H. R. 4740
    H.R.4740, the ``Fairness for Military Homeowners Act of 2012,'' 
would add a new section 303A to the SCRA to ensure that the relocation 
of a Servicemember to serve on active duty away from the 
Servicemember's principal residence would not prevent the Servicemember 
from refinancing a mortgage on such residence. VA does not oppose H.R. 
4740, but notes that it could impact loan subsidy costs.
    VA currently guarantees two types of refinances. The Interest Rate 
Reduction Refinance Loan (IRRRL) is the more common option, as it is 
obtained by Veterans who already have VA-guaranteed loans but want to 
reduce their interest rates. Section 3703(e) of title 38, United States 
Code, does not make occupancy a requirement for IRRRLs because the 
Secretary already has a contingent liability on the loan being 
refinanced, and any reduction in interest rate could help VA avoid a 
loss on a guaranty claim payment. Therefore, H.R. 4740 would not change 
the way the Secretary administers IRRRLs.
    The other type of refinance--a regular or cash-out refinance--
usually occurs when a Veteran refinances a loan that is not already 
guaranteed by VA. Because 38 U.S.C. Sec.  3710(a)(5) includes occupancy 
as a requirement for these types of refinances, H.R. 4740 would affect 
the number of Veterans eligible to obtain them. VA cannot estimate the 
cost impact of this bill, however, because VA does not have data on the 
number of Veterans who are currently obligated on loans that are not 
VA-guaranteed, nor do we know how many of such Veterans might need to 
obtain a regular refinance pursuant to H.R. 4740.

H.R. 5747
    H.R. 5747, the ``Military Family Home Protection Act,'' would 
expand the mortgage protections of the SCRA to include Servicemembers 
who have served in support of a contingency operation, certain disabled 
Veterans, and surviving spouses. The bill would further extend from 9-
months to 12-months the period within which the protections apply once 
a Servicemember's period of service ends, and make such extension 
permanent. It would also increase the civil penalties associated with a 
pattern of violations and with violations of significant public 
interest.
    Although VA defers to the Departments of Defense and Justice on the 
merits of this bill, we offer the following comments.
    Section 303 of the SCRA, as proposed to be amended, would continue 
to protect Servicemembers who obtained mortgage obligations prior to 
the time their military service began and whose military service had a 
material effect on their ability to repay their mortgage obligations. 
The newly covered individuals would receive more protections, however, 
as their mortgages could be originated at any time, even after the 
period of military service began.
    Amended section 303(f)(1)(B) would define newly covered individuals 
to include Veterans who were retired under chapter 61 of title 10, 
United States Code, and are also ``totally disabled.'' It would be 
helpful if this were clarified to indicate whether ``totally disabled'' 
is intended to refer to those Veterans who have been rated by VA as 
having permanent and total service-connected disabilities. Likewise, as 
this provision is currently drafted, we cannot be certain whether the 
term ``surviving spouse'' in proposed section 303(f)(1)(B) is intended 
to mean a survivor who meets the criteria of 38 U.S.C. Sec. Sec.  
101(3) and 103. VA would be pleased to work with the Subcommittee staff 
to draft the necessary clarifications.
    Mr. Chairman, expanding the types of covered individuals eligible 
for SCRA protections would have an effect on VA's loan subsidy, as 
would extending from 9-months to 12-months the period in which the 
protections would apply after a Servicemember's period of service ends, 
as well as making such extension permanent. We also note that a newly 
covered Veteran would almost always be eligible to assert the 
protections. VA is unable to estimate the full cost impact of this 
proposal before today's hearing, but will provide an estimate for the 
record.
    In addition, we note that DoD Defense Manpower Data Center database 
may not reflect or provide information about the newly covered 
individuals. As such, it is not clear to VA how a lender or VA would 
ascertain the status of either a Servicemember who was serving in 
support of a contingency operation or that of a surviving spouse of a 
Servicemember.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you or the other Members of the Subcommittee may 
have. Thank you.

                                 
                  Prepared Statement of John K. Moran

    Good Morning Chairman Stutzman, Ranking Member Braley, and 
distinguished Members of the Subcommittee. Thank you for the 
opportunity to testify before you today to discuss the Department of 
Labor's (DOL or Department) views on pending legislation. I commend you 
all for your tireless efforts to ensure that America fulfills its 
obligations to our returning Service Members, Veterans, and their 
families.
    President Obama and Secretary Solis are committed to serving these 
brave men and women as well as they have served us. In support of this 
goal, the Department of Labor is working to implement a series of new 
initiatives to train, transition and employ Veterans. These initiatives 
are in addition to the core programs DOL has been administering for 
decades, providing Veterans, transitioning Service Members and their 
families with critical resources and expertise to assist and prepare 
them to obtain meaningful careers, maximize their employment 
opportunities, and protect their employment rights.
    My name is John Moran and I am honored to serve as the Deputy 
Assistant Secretary for Veterans' Employment and Training Service 
(VETS) at DOL. I look forward to working with the Committee to ensure 
that these men and women have the employment support, assistance and 
opportunities they deserve to succeed in the civilian workforce.
    This hearing is focused on four bills before the Committee: H.R. 
3860, H.R. 4115, H.R. 4740, and H.R. 5747. However, I will limit my 
remarks to H.R. 3860, the ``Help Veterans Return to Work Act'' and H.R. 
4115, the ``Helping Iraq and Afghanistan Veterans Return to Employment 
at Home Act,'' both of which would have a direct impact on the programs 
administered by the Department of Labor. DOL defers to the Departments 
of Veterans' Affairs (VA), Justice (DOJ) and Defense (DoD) on the 
remaining pieces of legislation.
              H.R. 3860--Help Veterans Return to Work Act
    The Uniformed Services Employment and Reemployment Rights Act of 
1994 (USERRA), prohibits discrimination against persons because of 
their past, present, or future military obligations. In addition, 
USERRA generally provides for prompt reemployment and full restoration 
of benefits upon completion of protected service, unless the employer 
can demonstrate that such employment or reemployment would impose an 
undue hardship. Under current law, any employer, regardless of size can 
raise the undue-hardship affirmative defense to reemploying certain 
Service Members. H.R. 3860 would amend title 38 to limit the undue-
hardship affirmative defense so that it could only be claimed by small 
businesses as defined under the Small Business Act.
    The Department believes that H.R. 3860 would help ensure that the 
undue-hardship exception is not used in ways that run counter to the 
law's goals. As such, the Department supports this legislation and 
looks forward to working with the Committee to protect the employment 
and reemployment rights of individuals who are called to serve.

 H.R. 4115--Helping Iraq and Afghanistan Veterans Return to Employment 
                              at Home Act
    H.R. 4115 would require the Secretary of Labor to establish, as a 
condition of a grant or contract to carry out DVOP or LVER services, 
that when the State approves or denies an application from a Veteran to 
obtain: (1) a certification to be a State tested nursing assistant or a 
certified nursing assistant; (2) a certification to be a registered 
nurse; (3) a certification to be an emergency medical technician; or 
(4) a commercial driver's license, the State takes into consideration 
any training received by the Veteran while serving on active duty in 
the Armed Forces.
    The Department supports the intent of this legislation and looks 
forward to working with the Committee to ensure that our Veterans and 
transitioning Service Members have every opportunity available to 
leverage their skills and training in pursuit of civilian careers. The 
Department of Labor recognizes that a more focused effort on 
credentialing can help lay the foundation necessary to support 
Veterans' transition to civilian employment and meet the needs of 
growing sectors of the civilian economy. As we invest in skills 
development, we will help job seekers, including recently returning 
Veterans, acquire the measurable and specific skills they need to move 
along directed career pathways, and give employers access to the 
skilled workers they need to compete globally.
    This legislation proposes leveraging Federal funding to incentivize 
states to facilitate Veterans qualifying for certain licenses and 
credentials. The Department notes that to implement this legislation, 
States likely would require assistance in obtaining information on the 
skills possessed by Veterans separating from various military 
occupations in order to be able to effectively evaluate the equivalence 
of that training and experience against existing certification or 
licensing requirements. In addition, the Department would need to 
evaluate the adequacy of each state's effort in this area. The 
Department also would also like to help ensure consistent measures 
across states' efforts to ensure separating servicemembers have a 
reasonable expectation of their ability to earn credentials independent 
of their state of residence upon transition.
    This proposed legislation is a welcome addition to current 
initiatives to support credentialing and licensing for separating 
servicemembers. The Department notes that the Military Credentialing 
and Licensing Task Force, stood up by the President in August 2011 as 
part of his comprehensive plan to lower veteran unemployment and ensure 
that servicemembers leave the military career-ready, has worked with 
manufacturing and credentialing agencies to expand certifications to 
military personnel with skills in the high-demand fields of 
engineering, logistics, machining, maintenance, and welding. Through 
these partnerships, servicemembers will be able to test for and earn 
civilian credentials immediately upon completing their initial military 
training.
    The Department is fully committed to providing a clear pathway for 
Veterans to transfer the significant experience they gain in the 
military towards good jobs in the civilian economy. As a result, DOL 
will continue to work on initiatives to facilitate this transition 
through innovative programs, and collaborative engagement with public, 
private and nonprofit sector organizations that can accelerate the 
licensing and certification of our Nation's Veterans.

                               Conclusion

    Every day, we are reminded of the tremendous sacrifices made by our 
servicemen and women, and by their families. One way that we can honor 
those sacrifices is by providing them with the best possible services, 
protections and programs our Nation has to offer.
    Mr. Chairman, Ranking Member Braley, Members of the Subcommittee, 
this concludes my statement. Thank you again for the opportunity to 
testify today. I would be pleased to answer any questions you may have.

                                 
              Prepared Statement of Frederick E. Vollrath

    Chairman Stutzman, Ranking Member Braley, and members of this 
distinguished Subcommittee thank you for extending the invitation to 
the Department of Defense to address pending legislation that would 
significantly affect our Servicemembers and Veterans: H.R. 3860, the 
proposed ``Help Veterans Return to Work Act,'' H.R. 4115, the proposed 
``Hire at Home Act,'' H.R. 4740, the proposed ``Fairness for Military 
Homeowners Act of 2012,'' and H.R. 5747, the proposed ``Military Family 
Home Protection Act.''

H.R. 3860, ``Help Veterans Return to Work Act''
    H.R. 3860, would limit the availability of an undue hardship 
defense under the Uniformed Services Employment and Reemployment Rights 
Act (USERRA), so that it only could be claimed by small businesses. The 
Department of Defense shares the goal of ensuring that the undue 
hardship exception is used in ways that reinforce the law's intent.

H.R. 4115, ``Hire at Home Act''
    The Department supports the intent of the legislation to encourage 
the States to consider military training for purposes of civilian 
credentialing. We defer to the Department of Labor as to how this bill 
proposes to incentivize States. President Obama recently announced the 
creation of a new Department of Defense-led Task Force charged with 
finding new opportunities for Servicemembers and Veterans to use skills 
they have learned in the military to gain relevant credentials, 
certifications, and licenses across a broad range of civilian 
occupations. This new Credentialing and Licensing Task Force is under 
the leadership of the Deputy Assistant Secretary of Defense for 
Readiness.
    The problem of Veterans' unemployment is serious and especially 
urgent for our youngest Veterans. According to the June 2012 Bureau of 
Labor Statistics Current Population Survey Monthly Averages the overall 
unemployment rate for post-9/11 Veterans averaged 12.7 percent. Even 
more startling, the unemployment rate for the youngest post-9/11 
Veterans - those aged 18 to 24 - averaged 20.2 percent.
    The Department of Defense provides high-quality training to Service 
members, and this high-quality training is closely linked to many of 
the high-demand, high-growth occupations in the civilian sector. 
Although many Veterans have acquired substantial job skills during 
their time in the military, military experience does not always appear 
to translate directly to the civilian labor market. In some cases, the 
lack of a formal credential that demonstrates what a Veteran knows and 
satisfies licensing requirements can be a barrier to obtaining civilian 
employment.
    The proposed legislation, H.R. 4115, conditionally requires the 
States to consider a Veteran's previous military training when 
approving or denying the following individual credentials:

      A certification to be a State tested nursing assistant or 
a certified nursing assistant.
      A certification to be a registered nurse.
      A certification to be an emergency medical technician.
      A commercial driver's license.

    The DoD Credentialing and Licensing Task Force directed by the 
President will look at the occupational areas mentioned as well as 
expand its focus to other high return areas. Specifically, the Task 
Force will focus its initial efforts on jobs in manufacturing, health 
care, information technology, logistics, and first responders--law 
enforcement, firefighters, and emergency medical technicians. These 
industries have an identified need for more skilled workers, and these 
industries stand to benefit from Veterans' expertise and training 
gained from military service.
    The Task Force will: (1) identify military specialties that readily 
transfer to high-demand jobs; (2) work with civilian credentialing and 
licensing associations to address gaps between military training 
programs and credentialing and licensing requirements; and (3) provide 
servicemembers with greater access to necessary certification and 
licensing exams. The Task Force effort is underway, and we look forward 
to future opportunities to inform Congress of our progress and 
outcomes.
    The Department of Defense appreciates Congressional interest and 
continued support for our Service members and Veterans. Our men and 
women have done incredible work, mastered cutting-edge technologies, 
and adapted to unpredictable situations. Those skills are what America 
needs for the jobs and industries of the future. As President Obama 
said, ``These are the kinds of Americans that every company should want 
to hire.''

H.R. 4740, ``Fairness for Military Homeowners Act''
    H.R. 4740, the proposed ``Fairness for Military Homeowners Act of 
2012,'' would amend the SCRA to ensure that servicemembers who move 
away from their principal residences for active duty are not prevented 
from refinancing a mortgage on those residences. This is consistent 
with the SCRA's overarching goal of ensuring that the consumer rights 
of servicemembers are not unfairly limited by virtue of their military 
service.
    The Department supports the intent of this legislation, but notes 
that it could impact loan subsidy costs. We will continue to review 
this legislation and can offer technical assistance.

H.R. 5747, ``Military Family Protection Act''
    The Department supports the intent of the legislation to increase 
protections for Servicemembers and their families, with the following 
comments.
    Section a) would amend 50 USC App 533 to expand protections for 
certain Servicemembers and surviving spouses, to obligations on real 
property that originated at any time. This is a considerable expansion 
in this area, as the SCRA's protection against nonjudicial foreclosures 
applies currently only to pre-service obligations. Practically 
speaking, then, this SCRA provision has traditionally offered the 
mortgage-related protections against nonjudicial foreclosures primarily 
to members of the Reserve Component, who are far more likely to have 
mortgage obligations prior to their entry on Active Duty. The 
Department supports this expansion.
    The amendments in section (a) propose to provide these expanded 
protections to Servicemembers serving in support of contingency 
operations; to retired veterans who are totally disabled at the time of 
such retirement; and to surviving spouses of Servicemembers who died 
while serving in support of a contingency operation or who died while 
in military service and whose death is service-connected. With respect 
to the amendment provisions regarding deployed Servicemembers, it is 
the Department's interpretation that the Committee intends to provide 
maximum protections to current Servicemembers deployed in support of 
contingency operations by making these provisions applicable to both 
pre- and post-service obligations. We support this expansion but note 
that the Defense Manpower Data Center (DMDC) Web site, however, cannot 
provide the deployment data required as to the personnel to whom these 
expanded protections would apply. It will, therefore, be incumbent upon 
the financial industry, which bears the legal onus to identify such 
Servicemembers, to fulfill all obligations ensuring Servicemembers 
receive the appropriate protections.
    With respect to the provisions regarding surviving spouses, DMDC 
can, for example, identify a surviving spouse where the Servicemember 
has elected the Survivor Benefit Plan (SBP) to ensure that this spouse 
receives the benefits thereunder. However, DMDC cannot identify a 
surviving spouse if a SBP election has not been made. Since SBP 
elections are normally made only in contemplation of retirement, this 
will not often be the case. The Department supports the extension of 
protections to surviving spouses. It will, therefore, be incumbent upon 
the financial industry, which bears the legal onus to identify such 
surviving spouses, to fulfill all obligations ensuring Servicemembers 
receive the appropriate protections.
    Additionally, DMDC does not have the ability to identify if the 
Servicemember's death is ``service-connected.'' Further, the 
determination if a member dies ``in support of a contingency 
operation'' is subject to interpretation. May, for example, a 
Servicemember mobilized to provide ``backfill'' support in CONUS be 
considered to have died in support of a contingeny operation if it is 
determined that his or her death occurred in the line of duty?
    Further problematic are determinations regarding veterans' status. 
Disability determinations are made by the Department of Veteran's 
Affairs, and we defer to the Department of Veteran's Affairs on the 
feasibility on providing that information to the housing industry.
    Section (f) would also amend Section 533 by providing definitions 
of ``veterans,'' ``surviving spouses,'' and ``covered time periods.'' 
As a general rule, we believe it better, for purposes of clarity, that 
all definitions be contained within section 511, but, if the drafters 
determine it necessary to carve out specific types of definitions only 
for these categories of personnel and that it is more appropriate for 
them to be contained within the subject paragraph, we do not object. In 
conclusion, the Department appreciates the Committee's desire to expand 
SCRA protections, subject to the comments provided herewith.
    In closing, I would just like to emphasize that taking care of our 
Military before, during and after their service to our country is one 
of the Department of Defense's highest priorities and we appreciate the 
Subcommittee's efforts to address some of the economic challenges 
Service Members and their families are facing during active duty and as 
they transition into civilian life. Mr. Chairman, that concludes my 
statement.

                                 
                 Prepared Statement of Thomas E. Perez

    Chairman Stutzman, Ranking Member Braley, and Members of the 
Subcommittee, thank you for holding this hearing on legislation that 
will impact the rights of servicemembers. It is a privilege to present 
our views about our shared priority of protecting the civil rights of 
our men and women in uniform.
    The Department of Justice has made enforcement of the 
Servicemembers Civil Relief Act (SCRA) and the Uniformed Services 
Employment and Reemployment Rights Act (USERRA) a top priority. I am 
pleased to share with you today some of the recent successes we have 
had in working with the Department of Defense to ensure that 
servicemembers' homes and credit are protected while they serve our 
Nation, and with the Department of Labor to ensure that servicemembers' 
jobs are here for them when they return. Lessons from our enforcement 
efforts over recent years suggest ways these laws could be amended to 
better protect the rights of servicemembers, and the bills the 
Subcommittee is considering today seek to do exactly that.

I. ENFORCEMENT ACCOMPLISHMENTS

    (a) CRA

    When servicemembers place their lives on the line to serve their 
country, they should be able to focus fully on their military duties, 
without having to live in fear that their homes will be wrongfully 
foreclosed without their knowledge. Last year, we reached two multi-
million dollar settlements on behalf of servicemembers, including a $20 
million settlement with Bank of America that is the largest SCRA 
settlement the Department has ever reached.
    That $20 million settlement began with a referral from the United 
States Marine Corps on behalf of a servicemember deployed to Iraq. Bank 
of America was scheduled to sell that servicemember's home at a 
trustee's sale in three days, even though Bank of America had already 
received a copy of his military orders. In the course of our 
investigation and settlement negotiations, the Department found that a 
total of 143 servicemembers' homes had been illegally foreclosed 
between 2006 and the middle of 2009. Under the May 2011 settlement, 
Bank of America will pay each victim a minimum of $116,785, plus 
compensation for any lost equity. Under the consent order, Bank of 
America will give the same compensation to additionally identified 
servicemembers whose homes were illegally foreclosed through December 
31, 2010. The Department reached a similar with Saxon Mortgage Services 
that will provide 22 servicemembers with a total of $2.87 million.
    Under both settlements, the banks have agreed not to pursue any 
remaining amounts owed under the mortgages; to take steps to remedy 
negative credit reporting; and to implement enhanced measures including 
monitoring, training, and checking loans against the Defense Manpower 
Data Center's SCRA database during the foreclosure process.
    In February, the Nation's five largest mortgage loan servicers 
(Bank of America, JPMorgan Chase & Co., Wells Fargo & Company, 
Citigroup Inc., and Ally Financial Inc.) agreed to terms similar to 
these two settlements as part of a broader $25 billion consent judgment 
with Federal and state attorneys general. These servicers will conduct 
full reviews of whether servicemembers have been illegally foreclosed 
on since 2006, and each identified victim will be compensated a minimum 
of $116,785, plus any lost equity with interest. All five servicers 
agreed to put in place better policies, procedures, and employee 
training to ensure full compliance with the SCRA.
    As a result of these 2011 and 2012 settlements, the vast majority 
of all foreclosures since 2006 will now be subject to court-ordered 
review to determine whether the SCRA rights of servicemembers were 
violated.

    (b) USERRA

    The Civil Rights Division has also been vigilant in protecting 
servicemembers' employment rights under USERRA. Servicemembers should 
be able to serve their country without running the risk of losing their 
jobs back home. To date, the Division has filed a total of 75 cases 
under USERRA, 42 of which have been filed during the current 
Administration. One such case involved Matthew King, a U.S. Army Guard 
member and Iraq War veteran, who was terminated from his job at Lowe's. 
In November 2011, the national hardware-store chain agreed to settle 
the Division's claims alleging that this termination violated USERRA, 
and King received $45,000 for back pay and liquidated damages.
    In another case, the Division went to trial and secured back pay 
and injunctive relief against the Alabama Department of Mental Health 
for failure to promptly reemploy a servicemember upon his return from 
active duty in Iraq. On appeal in this case, the Division successfully 
defended the first Eleventh Amendment challenge to USERRA.

    (c) Outreach

    These efforts would not be possible without our strong 
collaboration with the military community. The Department of Defense 
has provided critical assistance in identifying servicemembers whose 
rights were violated, and they have been a critical partner in our SCRA 
enforcement efforts. We have also worked to reach out to servicemembers 
directly. This past September, I joined the U.S. Attorney for the 
Western District of Kentucky, David Hale, and met with some 100 
servicemembers at the Fort Knox military installation, including 
several from the Warriors in Transition Unit, to discuss the civil-
rights protections we enforce on their behalf. This outreach continues. 
Last month, I joined with U.S. Attorneys David Hale of Kentucky and 
Jerry Martin of Tennessee and met with approximately 200 servicemembers 
of the 101st Airborne Division at Fort Campbell, which straddles the 
border of those two states.

II. COMMENTS ON PENDING LEGISLATION
    Through our enforcement work, we have achieved great successes on 
behalf of servicemembers, but we have also identified ways that the 
SCRA and USERRA could be strengthened to better protect the rights of 
servicemembers. In September 2011, the Department formally transmitted 
to Congress a package of proposals for strengthening these laws, and we 
are eager to work with the Committee on many of the issues you are 
confronting in these bills. We were pleased when Senator Patty Murray 
included many of our proposals in S. 2299, the ``Servicemembers Rights 
Enforcement Improvement Act.'' The Department would welcome the 
introduction of a companion bill by the leaders of this Committee as 
well.

    (a) CRA

    H.R. 5747, the proposed ``Military Family Home Protection Act,'' 
would amend the SCRA to double civil penalties for violations of 
section 303 of the Act, to $110,000 for a first violation and $220,000 
for subsequent violations. We support this change, and strongly urge 
the Committee to also include in this bill a provision that would 
double civil penalties for all violations of the Act. As you know, when 
Congress amended the SCRA to provide for civil penalties in 2010, it 
used the amounts authorized under the Fair Housing Amendments Act. 
These amounts, however, have not been adjusted for inflation, or for 
any other reason, since 1999. The Department believes that other 
violations of the law deserve the same heightened level of deterrence 
and remedy. This bill seeks to strengthen SCRA protections in a number 
of other important areas. We will continue to review these provisions 
and can offer technical assistance.
    H.R. 4740, the proposed ``Fairness for Military Homeowners Act of 
2012,'' would amend the SCRA to ensure that servicemembers who move 
away from their principal residences for active duty are not prevented 
from refinancing a mortgage on those residences. This is consistent 
with the SCRA's overarching goal of ensuring that the consumer rights 
of servicemembers are not unfairly limited by virtue of their military 
service. We will continue to review this legislation and can offer 
technical assistance.
    In addition to the amendments proposed by H.R. 5747 and H.R. 4740, 
we urge the Committee to amend the SCRA's affidavit requirement, which 
provides that a party seeking foreclosure or other default judgment 
against a servicemember must first file with the court an affidavit 
stating whether or not the servicemember is in military service, to 
clarify that such requirement includes the obligation to take 
reasonable steps to determine the servicemember's military status. Such 
steps would include, but are not limited to, searching available 
Department of Defense records. The amendment would simply codify what 
several courts have already held. We also urge the Committee to amend 
the SCRA to clarify that the private right of action and the Attorney 
General's authority to enforce the SCRA, which were made explicit in 
the Veterans' Benefits Act of 2010, apply retroactively to violations 
occurring before the date of enactment of that Act. This would be 
consistent with the Department's litigating position and with the 
recent decisions of the Fourth Circuit Court of Appeals, and would 
ensure that the SCRA rights of all servicemembers can be vindicated.

    (b) USERRA

    H.R. 3860, the proposed ``Help Veterans Return to Work Act,'' would 
amend USERRA to limit the undue-hardship affirmative defense to 
reemploying certain servicemembers so that it could only be claimed by 
small businesses. We share the goal of ensuring that the undue-hardship 
exception is not used in ways that run counter to the law's goals.
    H.R. 4115, the proposed ``Helping Iraq and Afghanistan Veterans 
Return to Employment at Home Act,'' is outside of our jurisdiction, and 
we defer to the Department of Labor on this legislation.
    In addition to the amendment proposed by H.R. 3860, we strongly 
urge the Committee to amend USERRA to grant the Attorney General 
independent authority to investigate and file suit to challenge 
employment policies or practices that establish a pattern or practice 
of violating USERRA. This change would make USERRA operate more like 
the SCRA and other civil-rights laws by allowing the United States to 
always serve as the plaintiff in USERRA cases, to vindicate the public 
interest in ensuring the statute is enforced. This would significantly 
strengthen the Department's ability to address systemic violations of 
servicemembers' employment rights (such as a policy prohibiting 
extended absences, including absences for military service) that could 
adversely affect the employment rights of multiple servicemembers.

    (c) Cross-cutting

    Finally, the Department urges the Committee to amend both the SCRA 
and USERRA to provide the Attorney General with civil investigative 
demand (CID) authority. While the Department of Labor has subpoena 
power in its USERRA investigations, the Department of Justice has no 
pre-suit investigative authority under USERRA or the SCRA, and must 
rely on voluntary cooperation from the subjects of our investigations. 
Greater investigative authority would strengthen the Department's 
ability to enforce both statutes, especially through pattern-or-
practice suits.
III. LOOKING FORWARD
    The Department appreciates the opportunity to report on our 
accomplishments in enforcing the SCRA and USERRA, and to comment on the 
legislation the Subcommittee is considering today. We stand ready to 
work with the Subcommittee in strengthening these important laws that 
protect the rights of our servicemembers.
    Thank you for the opportunity to share our views.

                                 
                   Materials Submitted For The Record

                   LETTERS OF SUPPORT FOR THE RECORD
    The
    American
    Legion

                        May 14,2012

    Honorable Elijah E. Cummings
    U.S. House of Representatives
    2235 Rayburn House Office Building
    Washington, DC 20515

    Dear Representative Cummings:

    On behalf of the 2.4 million members of The American Legion, I am 
writing this letter in support of your efforts to amend the 
Servicemembers Civil Relief Act (SCRA). Our servicemembers should be 
afforded every protection and right possible when deployed in service 
to our nation. These safeguards should be in place regardless of their 
status as an active duty member and they should extend to their 
families in situations of serious injury or death.

    Your proposed amendment to the 2013 National Defense Authorization 
Act would codify these protections. It would protect servicemembers 
deployed in support of contingency operations from home foreclosures, 
regardless of when the home was purchased. It would expand the civil 
penalties levied against unscrupulous lenders to better reflect the 
seriousness of violations against SCRA. Finally it would expand the 12-
month stay against foreclosures for servicemembers discharged with a 
100% disability rating and it would offer a similar stay for surviving 
spouses.

    When originally enacted, SCRA was a bipartisan effort to guarantee 
our nation, citizens and corporations alike took care of the family and 
servicemember when he or she deployed. It didn't perfectly meet the 
requirements and reality oftoday's military members. We appreciate your 
efforts to dramatically improve SCRA and better assist those in our 
Nation willing to serve.

    If we can be of further assistance, please don't hesitate to let us 
know.

                        National Commander

                                 
             VETERANS OF FOREIGN WARS OF THE UNITED STATES
                        May 15,2012

    The Honorable Elijah Cummings
    Ranking Member
    Committee on Oversight and Government Reform
    U.S. House of Representatives
    2471 Rayburn House Building
    Washington, D.C. 20515

    Dear Ranking Member Cummings:

    On behalf of the 2 million men and women of the Veterans of Foreign 
Wars of the United States (VFW) and our Auxiliaries, I am pleased to 
offer our support to your Amendment to the National Defense 
Authorization Act of2013 that would provide greater protections and 
expand coverage of the Servicemembers Civil Relief Act.

    In a time of war, and when a large portion of our fighting force is 
being drawn from the National Guard and reserves, every protection must 
be taken to ensure their lives are not further complicated by financial 
worries while they are deployed and once they return home. Your 
proposal goes a long way in protecting the homes of our Guard and 
reserve members, veterans and their surviving spouses. By lengthening 
the time our servicemembers have to get their financial affairs in 
order and by placing real punitive deterrents on lenders, our veterans 
can have one less thing to worry about while reintegrating from war.

    Thank you for continuing to take the lead on this initiative, and 
for your continued support of our armed forces and veterans. We look 
forward to working with you to advance this critical initiative.

                        Sincerely,

                        Raymond C. Kelley, Director
                        VFW National Legislative Service

                                 
                       DISABLED AMERICAN VETERANS
                        May 14, 2012

    The Honorable Elijah Cummings
    United States House of Representatives
    2235 Rayburn House Office Building
    Washington, DC 20515

    Dear Representative Cummings:

    I am writing on behalf of the Disabled American Veterans (DAV), a 
congressionally chartered national veterans service organization with 
1.2 million members, all of whom were disabled as a result of active 
duty in the United States Armed Forces. The DAV works to build better 
lives for America's disabled veterans, their families and survivors.

    We have reviewed your proposed bill, which amends the 
Servicemembers Civil Relief Act to extend from the current grace period 
to twelve months after military service to protect covered 
servicemembers and their surviving spouses, as well as veterans rated 
totally disabled by the Department of Veterans Affairs (VA) at time of 
military retirement, against mortgage sale or foreclosure, as well as 
the stay of proceedings, in the case of an obligation on real property 
that originated before the servicemember's military service.

    While we do not have a resolution on this specific matter from our 
members, we support its general purpose, as it would extend the period 
of protection for servicemembers against mortgage sale or foreclosure. 
However, we believe that section 1(f)(1)(B) of the bill is extremely 
restrictive in requiring a VA disability rating of 100 percent at the 
time of retirement.

    Thank you again for introducing this important legislation. I look 
forward to working with you and your staff to continue the DAV mission 
of building better lives for America's disabled veterans and their 
families.

                        Sincerely

                        JOSEPH A. VIOLANTE
                        National Legislative Director

    JAV:lmb
    c:Representative Bob Filner, Ranking Member, House Veterans' 
Affairs Committee
              Representative David Dreier, Chairman, House Rules 
Committee
              Representative Louise Slaughter, Ranking Member, House 
Rules Committee

                                 
                     PARALYZED VETERANS OF AMERICA
    May 9, 2012

    Honorable Elijah E. Cummings
    U.S. House of Representatives
    2235 Rayburn House Office Building
    Washington, D.C. 20515

    Dear Congressman Cummings:

    On behalf of Paralyzed Veterans of America (PVA), a Congressionally 
Chartered veterans' service organization that represents veterans with 
spinal cord injuries and diseases, I am writing to express our support 
for your legislation that would make needed reform in the 
Servicemembers Civil Relief Act (SCRA).

    SCRA provides certain protection for servicemembers against sale, 
foreclosure, and seizure of property when those servicemembers are 
unable to meet the financial obligation on real or personal property. 
To expand this protection offered under SCRA the House recently passed 
H.R. 1263. This legislation would offer the same protection to the 
spouse of a servicemember who died while in the military and whose 
death is service-connected. This protection offered in H.R. 1263 is of 
significant importance to protect the home of the deceased 
servicemember where the spouse and children may reside.

    Your proposed legislation will expand the protection of SCRA to 
include servicemembers who are seriously injured while serving in the 
military. Their homes should also have the same protection from 
foreclosure. It will extend the period of protection from mortgage 
foreclosure to 12 months after the veteran leaves the service. It also 
requires lending institutions to establish a toll free phone number for 
the servicemember to discuss their lending program.

    Your proposed legislation is a strong example of the concern you 
have displayed for veterans and those serving in the military. We look 
forward to working with you on this legislation, or other legislation 
that benefits our servicemembers and our veterans.

    Sincerely,

    Carl Blake
    National Legislative Director
    Paralyzed Veterans of America

                                 
                                  MOAA
    Military Officers Association of America
    VADM Norbert R. Ryan, Jr. USN (Ret)
    President

    June 6,2012

    The Honorable Elijah Cummings
    United States House of Representatives
    Washington, DC 20515

    Dear Congressman Cummings:

    On behalf of the over 370,000 members of the Military Officers 
Association of America (MOAA), I am writing to express our support for 
your amendment in H.R. 4130, the House-passed version of the FY 2013 
National Defense Authorization Act (NOAA), which would expand 
protections under the Servicemembers Civil Relief Act (SCRA).

    Your provision, one that passed with overwhelmingly bi-partisan 
support in the House, would provide significant foreclosure protections 
for servicemembers who own homes and are sent into harm's way, 
regardless of when they purchased their home.

    Our young men and women in uniform who are deployed to contingency 
operations will be able to focus on the mission at hand and not have to 
worry if their family remaining at home will be able to keep a roof 
over their head.

    Fortunately your provision does not stop there. It extends 
protections to two other deserving groups who are forced to deal with 
life-altering changes- survivors and 100% disabled veterans.

    Thank you for your leadership, for continuing to look out after the 
interests of our Nation's servicemembers and their families, and for 
sponsoring this important amendment - we pledge our strong support and 
look forward to its inclusion in the FY 2013 NOAA.

    Sincerely, & Best

                                 
                   Materials Submitted For The Record

 REPORT ON: FIGHTING ON THE HOME FRONT: THE GROWING PROBLEM OF ILLEGAL 
                FORECLOSURES AGAINST U.S. SERVICEMEMBERS
                        Democratic Staff Report 
                             Prepared for:

                 Senator John D. (Jay) Rockefeller IV 
                                Chairman
          Committee on Commerce, Science, and Transportation 
                          United States Senate
                   http://commerce.senate.gov/public/

                   Representative Elijah E. Cummings 
                             Ranking Member
             Committee on Oversight and Government Reform 
                 United States House of Representatives
                 http://democrats.oversight.house.gov/

                             July 12, 2011

              TABLE OF CONTENTS [From The Original Report]

    Executive Summary 
........................................................................
..............................3

    I.  Overview of Servicemembers Civil Relief Act (SCRA) 
........................................5

    II.  Widespread and Increasing Violations of the SCRA 
........................................6

        A. JPMorgan Chase 
........................................................................
.......................6

        B. Bank of America (Countrywide) 
.....................................................................7

        C. Morgan Stanley (Saxon Mortgage Services, Deutsche Bank) 
....................8

    III.  Interagency Findings of Illegal Actions and ``Elevated'' 
Concern ....................9

    IV.  Actions by CFPB and Military JAGs 
..............................................................10

    V.  Servicemember Case Studies 
........................................................................
.....12

        A. Army National Guard Warrant Officer Charles Pickett 
..............................12

        B. Army Captain Kenneth Gonzales 
..................................................................14

    VI.  Efforts by Ranking Member Cummings to Investigate 
...............................16

Executive Summary
    In the midst of World War II, Congress enacted the Soldiers' and 
Sailors' Civil Relief Act ``to protect those who have been obliged to 
drop their own affairs to take up the burdens of the nation.'' In 2003, 
Congress passed the Servicemembers Civil Relief Act (SCRA) to update 
the law and provide additional protections for servicemembers. In 2010, 
Congress enacted amendments to the SCRA specifically relating to 
mortgages and foreclosures.
    The SCRA prohibits foreclosures against servicemembers without 
court orders and restricts mortgage banks from charging interest fees 
above 6% during active duty service.
    When isolated reports of illegal foreclosures and inflated fees 
against servicemembers first arose, mortgage servicing companies 
downplayed the extent of these problems. As thousands of servicemembers 
began coming forward, however, the widespread scope of these problems 
became more evident.
    Multiple mortgage servicing companies have now conceded that they 
violated the SCRA by illegally foreclosing on servicemembers and by 
charging fees in excess of the maximum amounts allowed under the SCRA. 
Three banks have been forced to pay multi-million dollar settlements 
relating to these abuses. The largest to date was JPMorgan, which 
initially announced that it would pay $2 million, but later agreed to 
pay $56 million to settle claims that it overcharged military personnel 
and illegally seized the homes of active-duty military personnel 
protected by the SCRA.
    Similarly, in announcing a $20 million settlement against Bank of 
America, Justice Department officials condemned the bank's actions, 
stating that it ``failed to protect and respect the rights of our 
servicemembers, failed to comply with clearly mandated procedures, and 
foreclosed against homeowners who are valiantly serving our nation.''
    The scale of these problems continued to expand, however, as 
Federal regulators dug deeper. On April 13, four Federal agencies that 
regulate mortgage servicing companies issued a report finding 
``critical weaknesses in servicers' foreclosure governance processes, 
foreclosure document preparation processes, and oversight and 
monitoring of third-party vendors, including foreclosure attorneys.'' 
The report raised ``escalated'' concerns about the systemic 
deficiencies of 14 mortgage banks, including multiple SCRA violations.
    This interagency review was cursory, however, and was based on only 
a sampling of a ``relatively small number of files.'' As a result, the 
agencies initiated enforcement action against all 14 banks, directing a 
more comprehensive review to identify additional borrowers and 
servicemembers ``that have been financially harmed.''
    In addition, the Dodd-Frank Wall Street Reform and Consumer 
Protection Act established the Consumer Financial Protection Bureau 
(CFPB) to protect consumers from unfair, deceptive, and abusive 
financial practices. Under the leadership of Elizabeth Warren, the CFPB 
organized an Enforcement Division and an Office of Servicemember 
Affairs led by Holly Petraeus, the wife of Gen. David H. Petraeus, the 
former top U.S. commander in Afghanistan.
    Mrs. Petraeus focused quickly on the issue of SCRA violations, 
making public statements to increase awareness and issuing warning 
letters to the nation's largest 25 mortgage banks. In addition, on July 
6, 2011, she announced that the CFPB and the Judge Advocates General of 
the United States Army, Marine Corps, Navy, Air Force, and Coast Guard 
agreed to a number of steps ``to provide stronger protections for 
servicemembers and their families.'' In particular, they established 
``a formal working group with the goal of achieving a coordinated 
response to unlawful conduct targeted at servicemembers and their 
families.''
    Although it is now clear that illegal actions against 
servicemembers are much more widespread than originally believed, their 
full scope is not yet known. Violations of the SCRA have taken a 
significant toll on servicemembers who have had to wage battles on two 
fronts-- risking their lives in service of their country abroad while 
fighting illegal foreclosures and inflated fees at home.
I. OVERVIEW OF SERVICEMEMBERS CIVIL RELIEF ACT (SCRA)
    In 1940, Congress enacted the Soldiers' and Sailors' Civil Relief 
Act ``to protect those who have been obliged to drop their own affairs 
to take up the burdens of the nation.'' In 2003, Congress passed the 
Servicemembers Civil Relief Act (SCRA) to update the law and provide 
additional protections for servicemembers. \1\ In 2010, Congress 
enacted additional provisions creating a private right of action and 
extending certain protections regarding mortgages and foreclosures. \2\
---------------------------------------------------------------------------
    \1\ Pub. L. No. 108-189 (2003).
    \2\ See Pub. L. No. 111-346 (2010); Pub. L. No. 111-275 (2010).
---------------------------------------------------------------------------
    When the SCRA was passed in 2003 with broad bipartisan support, a 
report by the House Committee on Veterans' Affairs stated:

    Congress has long recognized that the men and women of our military 
services should have civil legal protections so they can ``devote their 
entire energy to the defense needs of the Nation.'' With hundreds of 
thousands of servicemembers fighting in the war on terrorism and the 
war in Iraq, many of them mobilized from the reserve components, the 
Committee believes the Soldiers' and Sailors' Civil Relief Act (SSCRA) 
should be restated and strengthened to ensure that its protections meet 
their needs in the 21st century. \3\
---------------------------------------------------------------------------
    \3\ House Committee on Veterans' Affairs, Servicemembers Civil 
Relief Act, 108th Cong. (2003) (H. Rept. 108-81).
---------------------------------------------------------------------------
    The purpose of the SCRA is to ``provide for, strengthen, and 
expedite the national defense'' through the ``temporary suspension of 
judicial and administrative proceedings and transactions that may 
adversely affect the civil rights of servicemembers during their 
military service.'' The Act addresses a host of proceedings, including 
those affecting motor vehicle leases, life insurance, and mortgages. 
\4\
---------------------------------------------------------------------------
    \4\ See Pub. L. No. 108-189 (2003).
---------------------------------------------------------------------------
    The SCRA protects active duty servicemembers against foreclosures 
during their period of military service. It states:
    A sale, foreclosure, or seizure of property for a breach of an 
obligation ... shall not be valid if made during, or within 9 months 
after, the period of the servicemember's military service except ... 
upon a court order granted before such sale, foreclosure, or seizure 
with a return made and approved by the court. \5\
---------------------------------------------------------------------------
    \5\ 5 50 U.S.C. app. Sec.  533(c).
---------------------------------------------------------------------------
    The SCRA also provides courts with broad authority to ``stay the 
proceedings for a period of time as justice and equity require'' and to 
``adjust the obligation to preserve the interests of all parties.'' \6\ 
Finally, the SCRA provides that mortgage interest rates for 
servicemembers may not exceed 6% for pre-service debt during the period 
of military service and for one year after termination of service. \7\
---------------------------------------------------------------------------
    \6\ Id. at Sec.  533(b).
    \7\ Id. at Sec.  527.
---------------------------------------------------------------------------
II. WIDESPREAD AND INCREASING VIOLATIONS OF THE SCRA
    Multiple mortgage servicing companies have now conceded that they 
violated the SCRA by illegally foreclosing on servicemembers and by 
charging fees in excess of the maximum amounts allowed under the SCRA. 
Although initially downplaying the extent of the problem, several banks 
have been forced to pay multi-million dollar settlements relating to 
these violations.

    A. JPMorgan Chase

    In January 2011, JPMorgan admitted publicly that it overcharged 
thousands of military families in violation of the SCRA. One of these 
servicemembers was Marine Captain Jonathon Rowles, a fighter pilot who 
sued the bank for overcharging his family and illegally attempting to 
seize his home. Captain Rowles' case identified systematic failures in 
JPMorgan's SCRA procedures, resulting in illegal foreclosures, improper 
fees, and negative credit actions against servicemembers. \8\
---------------------------------------------------------------------------
    \8\ JP Morgan Overcharged Troops on Mortgages, NBC News (Jan. 17, 
2011) (online at www.nbcnewyork.com/news/breaking/No--2--bank--
overcharged--troops--on--mortgages-113875324.html). See also 
Overcharges on Soldiers' Mortgages Investigated, NBC News (Jan. 26, 
2011) (online at today.msnbc.msn.com/id/41043127/ns/today-money/t/
overcharges-soldiers-mortgages-investigated/).
---------------------------------------------------------------------------
    Initially, JPMorgan announced that it would pay $2 million to 
approximately 4,500 servicemembers. \9\ But within three months--by 
April 2011--JPMorgan conceded that its abuses were much worse. Instead 
of paying only $2 million, the company agreed to pay $56 million to 
settle claims that it overcharged military personnel and illegally 
seized the homes of active-duty military personnel protected by the 
SCRA. \10\
---------------------------------------------------------------------------
    \9\ JPMorgan Mails $2 Million to Military Families for Overcharges, 
Lost Homes, Bloomberg (Jan. 18, 2011) (online at www.bloomberg.com/
news/2011-01-18/jpmorgan-mails-2-million-to-military-families-for-
overcharges-lost-homes.html).
    \10\ JPMorgan Settles Military Mortgage Suits for $56 Million, 
Bloomberg (Apr. 21, 2011) (online at www.businessweek.com/news/2011-04-
21/jpmorgan-settles-military-mortgage-suits- for-56-million.html).
---------------------------------------------------------------------------
    Last month, JPMorgan ousted David Lowman, the mortgage chief who 
ran the company's home-lending unit since 2006. \11\ JPMorgan CEO Jamie 
Dimon stated that this was the worst mistake the bank has ever made. At 
the company's May 17 annual shareholder meeting, he stated: ``We deeply 
apologize to the military, the veterans, anyone who's ever served this 
country. ... We're sorry.'' \12\
---------------------------------------------------------------------------
    \11\ JPMorgan Ousts Home-Lending Chief After Foreclosure Lapses, 
Bloomberg (June 14, 2011) (online at www.businessweek.com/news/2011-06-
14/jpmorgan-ousts-home-lending-chief- after-foreclosure-lapses.html).
    \12\ Id.

---------------------------------------------------------------------------
    B. Bank of America (Countrywide)

    In May 2011, the Department of Justice announced that Bank of 
America Home Loan Servicing, formerly known as Countrywide Home Loans 
Servicing, would pay $20 million for hundreds of SCRA violations. The 
Department determined that the bank ``foreclosed on approximately 160 
servicemembers between January 2006 and May 2009 without court 
orders.'' In addition to paying $20 million for violations during this 
time period, the bank must also compensate servicemembers wrongfully 
foreclosed on from June 2009 through 2010. \13\
---------------------------------------------------------------------------
    \13\ Department of Justice, Justice Department Settles with Bank of 
America and Saxon Mortgage for Illegally Foreclosing on Servicemembers 
(May 26, 2011) (online at www.justice.gov/opa/pr/2011/May/11-crt-
683.html).
---------------------------------------------------------------------------
    In announcing the settlement, Andre Birotte, the U.S. Attorney for 
the Central District of California, condemned the bank's violations:

    Countrywide Home Loans failed to protect and respect the rights of 
our servicemembers, failed to comply with clearly mandated procedures 
and foreclosed against homeowners who are valiantly serving our nation. 
Military families lost their homes when Countrywide violated the law, 
causing undue stress to wartime personnel. \14\
---------------------------------------------------------------------------
    \14\ Id.

    James Jacks, the U.S. Attorney for the Northern District of Texas, 
---------------------------------------------------------------------------
was also critical:

    With the numerous sacrifices our servicemembers make while they are 
serving our country, the last thing they need to worry about is whether 
or not their families will be forced from their homes. These lenders' 
callous disregard for the SCRA, a law which was designed to insulate 
these patriots from unlawful foreclosures and other civil and financial 
obligations while they are on active duty, is deplorable. \15\
---------------------------------------------------------------------------
    \15\ Id.
---------------------------------------------------------------------------
    According to the Department, the bank foreclosed on servicemembers 
in many instances ``where it knew, or should have known, about their 
military status,'' and the ``victims include individuals who have 
served honorably in Iraq and Afghanistan.'' The settlement requires 
SCRA training for bank employees and agents, referrals of future SCRA 
complaints to the Justice Department, and repairs to negative credit 
reports related to wrongful foreclosures. \16\
---------------------------------------------------------------------------
    \16\ Id.
---------------------------------------------------------------------------
    Bank of America Executive Vice President Terry Laughlin stated: 
``While most cases involve loans originated by Countrywide and the 
improper foreclosures were taken or started by Countrywide prior to our 
acquisition, it is our responsibility to make things right. These 
errors are not acceptable, and we certainly regret them.'' \17\
---------------------------------------------------------------------------
    \17\ Mortgage Servicing Means Occasionally Having to Say You're 
Sorry, American Banker (May 27, 2011) (online at 
www.americanbanker.com/bankthink/mortgage-servicing-1038149-1.html).

---------------------------------------------------------------------------
    C. Morgan Stanley (Saxon Mortgage Services, Deutsche Bank)

    In March 2009, a Federal judge ruled that National Guard Sergeant 
James Hurley, who was called to active duty in Iraq in 2004, was 
illegally foreclosed on in violation of the SCRA by a Morgan Stanley 
subsidiary, Saxon Mortgage Services, and Deutsche Bank Trust Company. 
The foreclosure forced Sergeant Hurley's wife and two young children to 
find shelter elsewhere while he was deployed overseas. \18\
---------------------------------------------------------------------------
    \18\ A Reservist in a New War, Against Foreclosure, New York Times 
(Jan. 26, 2011) (online at www.nytimes.com/2011/01/27/business/
27foreclose.html).
---------------------------------------------------------------------------
    Despite the court ruling, it took Sergeant Hurley two years in 
continued litigation to settle his claims because the banks refused to 
pay any damages other than the sale value of the home, which was less 
than the mortgage Sergeant Hurley owed. The banks completed the 
foreclosure without the court hearing required by the SCRA, claiming 
there was no evidence Sergeant Hurley was on military duty. Yet the 
banks admitted in a court filing that one of their foreclosure 
attorneys ``learned in April 2005 that Sergeant Hurley had been on 
active duty since the previous October.'' \19\
---------------------------------------------------------------------------
    \19\ Id.
---------------------------------------------------------------------------
    In March 2011, the Department of Justice announced that it was 
investigating these and other illegal activities by Morgan Stanley and 
its subsidiary. The bank's attorneys attempted to downplay the 
investigation, stating that it was ``merely a preliminary investigation 
based on unproven allegations, for which no liability or wrongdoing has 
been found.'' \20\
---------------------------------------------------------------------------
    \20\ U.S. Inquiry on Military Family Foreclosures, New York Times 
(Mar. 11, 2011) (online at www.nytimes.com/2011/03/12/business/
12military.html).
---------------------------------------------------------------------------
    Nevertheless, two months later, the Department of Justice announced 
that the bank would pay $2.35 million to settle multiple claims of 
violations of the SCRA. The Department stated that, in addition to 
Sergeant Hurley's illegal foreclosure, the banks foreclosed on other 
servicemembers when they ``knew or should have known about their 
military status,'' including ``men and women who have served honorably 
in Iraq, some of whom were severely injured in the line of duty.'' \21\
---------------------------------------------------------------------------
    \21\ Department of Justice, Justice Department Settles with Bank of 
America and Saxon Mortgage for Illegally Foreclosing on Servicemembers 
(May 26, 2011) (online at www.justice.gov/opa/pr/2011/May/11-crt-
683.html).
---------------------------------------------------------------------------
    Following the settlement, Morgan Stanley issued the following 
statement: ``We want to apologize to those military families that were 
affected by any mistakes made in the foreclosure process.'' \22\
---------------------------------------------------------------------------
    \22\ Mortgage Servicing Means Occasionally Having to Say You're 
Sorry, American Banker (May 27, 2011) (online at 
www.americanbanker.com/bankthink/mortgage-servicing-1038149-1.html).

III. INTERAGENCY FINDINGS OF ILLEGAL ACTIONS AND ``ELEVATED'' CONCERN
    In addition to reports about specific servicemembers and banks 
described above, an analysis by Federal regulators raises a host of new 
concerns about the full scope of these abuses. On April 13, 2011, four 
agencies that regulate mortgage servicing companies--the Office of the 
Comptroller of the Currency, the Federal Reserve System, the Office of 
Thrift Supervision, and the Federal Deposit Insurance Corporation--
issued a report finding widespread foreclosure abuses by 14 mortgage 
servicing companies, including multiple SCRA violations.
    The report found ``critical weaknesses in servicers' foreclosure 
governance processes, foreclosure document preparation processes, and 
oversight and monitoring of third-party vendors, including foreclosure 
attorneys.'' \23\
---------------------------------------------------------------------------
    \23\ Federal Reserve System, Office of the Comptroller of the 
Currency, and Office of Thrift Supervision, Interagency Review of 
Foreclosure Policies and Practices (Apr. 13, 2011) (online at 
www.occ.treas.gov/news-issuances/news-releases/2011/nr-occ-2011-
47a.pdf).
---------------------------------------------------------------------------
    The report also found violations of law that elevated the agencies' 
level of concern across the board. The report stated:

    [T]he weaknesses at each servicer, individually or collectively, 
resulted in unsafe and unsound practices and violations of applicable 
Federal and state law and requirements. The results elevated the 
agencies' concern that widespread risks may be presented--to consumers, 
communities, various market participants, and the overall mortgage 
market. The servicers included in this review represent more than two-
thirds of the servicing market. Thus, the agencies consider problems 
cited within this report to have widespread consequences for the 
national housing market and borrowers. \24\
---------------------------------------------------------------------------
    \24\ Id.
---------------------------------------------------------------------------
    With respect to servicemembers in particular, the report found 
``cases in which foreclosures should not have proceeded,'' including 
against borrowers who were ``covered by the Servicemembers Civil Relief 
Act.'' \25\
---------------------------------------------------------------------------
    \25\ Id.
---------------------------------------------------------------------------
    This review was based on only a sampling of a ``relatively small 
number of files.'' To address the widespread abuses identified in this 
cursory review, the agencies initiated enforcement action against all 
14 banks, directing a comprehensive review of all files of affected 
homeowners ``to identify borrowers that have been financially harmed 
and provide remediation.'' \26\
---------------------------------------------------------------------------
    \26\ Id.
---------------------------------------------------------------------------
IV. ACTIONS BY CFPB AND MILITARY JAGs
    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
established the Consumer Financial Protection Bureau (CFPB) to protect 
consumers from unfair, deceptive, and abusive financial practices. \27\ 
Under the leadership of Elizabeth Warren, the CFPB organized an 
Enforcement Division and an Office of Servicemember Affairs dedicated 
to protecting the rights of servicemembers and their families.
---------------------------------------------------------------------------
    \27\ Pub. L. No. 11-203 (2010).
---------------------------------------------------------------------------
    On January 4, 2011, Ms. Warren announced that Holly Petraeus would 
lead the Office of Servicemember Affairs. As the wife of General David 
H. Petraeus, the former top U.S. commander in Afghanistan, and the 
daughter of a career Army officer, Mrs. Petraeus previously served as 
the Director of BBB Military Line, a program that assisted military 
families on consumer issues. \28\
---------------------------------------------------------------------------
    \28\ Holly Petraeus Will Lead Consumer Financial Protection 
Bureau's Office for Service Member Affairs, Washington Post (Jan. 4, 
2011) (online at www.washingtonpost.com/wp-dyn/content/article/2011/01/
04/AR2011010405627.html).
---------------------------------------------------------------------------
    After she was appointed, Mrs. Petraeus focused quickly on the issue 
of SCRA violations. In one of her first public statements in her new 
role, she spoke directly about the severe repercussions these 
violations have on servicemembers and their families. She stated:

    It can be devastating. It is a terrible situation for the family at 
home and for the servicemember abroad, who feels helpless. I would hope 
that the recent problems will be a wake-up call for all banks to review 
their policies and be sure they comply with the act. \29\
---------------------------------------------------------------------------
    \29\ A Reservist in a New War, Against Foreclosure, New York Times 
(Jan. 26, 2011) (online at www.nytimes.com/2011/01/27/business/
27foreclose.html).
---------------------------------------------------------------------------
    Within days, Mrs. Petraeus sent warning letters to the nation's 25 
top mortgage servicing companies, directing them ``to take steps to 
educate all your employees about the financial protections that the 
SCRA provides and to review your loan files to ensure compliance.'' 
\30\
---------------------------------------------------------------------------
    \30\ See, e.g., Letter from Holly Petraeus, Team Lead, Office of 
Servicemember Affairs, Consumer Financial Protection Bureau, to Brian 
T. Moynihan, CEO and President, Bank of America Corporation (Feb. 1, 
2011).
---------------------------------------------------------------------------
    In addition, last week, on July 6, 2011, Mrs. Petraeus announced 
that the CFPB and the Judge Advocates General of the United States 
Army, Marine Corps, Navy, Air Force, and Coast Guard agreed to a number 
of steps ``to provide stronger protections for servicemembers and their 
families.'' \31\
---------------------------------------------------------------------------
    \31\ Consumer Financial Protection Bureau, Consumer Financial 
Protection Bureau and Military's Top Uniformed Lawyers Release Joint 
Statement of Principles (July 6, 2011) (online at 
www.consumerfinance.gov/pressrelease/consumer-financial-protection-
bureau-and-militarys-top-uniformed-lawyers-release-joint-statement-of-
principles/).

[GRAPHIC] [TIFF OMITTED] T5613.001


    For example, they agreed to establish ``a single point of contact 
within the CFPB's Enforcement Division that will allow members of the 
Judge Advocate Generals' Corps to share information on consumer 
complaints from servicemembers and military families.'' They also 
agreed to establish ``a formal working group with the goal of achieving 
a coordinated response to unlawful conduct targeted at servicemembers 
and their families.'' \32\
---------------------------------------------------------------------------
    \32\ Id.
---------------------------------------------------------------------------
    The top goal of this joint effort by CFPB and the nation's top 
uniformed lawyers is to protect servicemembers and their families 
``from unlawful acts or practices by providers of consumer financial 
products or services, including through enforcement actions where 
necessary.'' \33\ In her statement announcing these steps, Mrs. 
Petraeus warned about the predatory practices of mortgage servicing 
companies:
---------------------------------------------------------------------------
    \33\ Id.

    I have worked for years trying to protect military families from 
predatory practices and to help raise awareness of the unique financial 
challenges they face--and I know the Judge Advocate Generals have been 
on the front lines in each of those fights. Servicemembers and their 
families sacrifice a great deal for our country and they deserve 
advocates who will use every available resource to protect them from 
financial threats. \34\
---------------------------------------------------------------------------
    \34\ Id.
---------------------------------------------------------------------------
    A joint statement issued by the Judge Advocates General also warned 
about the predatory abuses by mortgage servicing companies:

    Too often our Soldiers, Marines, Sailors, Airmen, and Coast 
Guardsmen are targeted by predatory lenders and they become victims of 
unfair financial practices. This agreement recognizes the crucial role 
financial readiness plays in mission readiness and we look forward to 
partnering with the Consumer Financial Protection Bureau to vigorously 
protect servicemembers and their families from unlawful acts or 
practices by providers of consumer financial products or services. \35\
---------------------------------------------------------------------------
    \35\ Id.
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V. SERVICEMEMBER CASE STUDIES

    A. Army National Guard Warrant Officer Charles Pickett

    Chief Warrant Officer 3 Charles L. Pickett is a helicopter pilot in 
the Army National Guard who lives in Anthem, Arizona, with his two 
daughters. From 2009 to 2011, while he was on active duty, Bank of 
America attempted to foreclose on his home on three separate occasions 
in violation of the Servicemembers Civil Relief Act (SCRA). Attempting 
to prevent the foreclosure in the midst of his deployment to Iraq, 
Warrant Officer Pickett hired an attorney, Colonel John Odom. Although 
they were ultimately successful in halting the foreclosures, Bank of 
America's actions resulted in damage to Warrant Officer Pickett's 
credit, a cancelation of his credit line with USAA, and unnecessary 
stress while he was serving his country on the battlefield.

    Timeline

    August 6, 2003: Mr. Pickett purchased a home with a mortgage from 
Countrywide Mortgage Loans (Bank of America acquired Countrywide in 
July 2008).
    November 2003-October 2008: Mr. Pickett joined the Arizona National 
Guard as a Warrant Officer and helicopter pilot.
    March 2009: Warrant Officer Pickett joined the Army National Guard.
    May 5, 2009: Warrant Officer Pickett received orders to deploy to 
Iraq under Operation Iraqi Freedom. Although not required, Warrant 
Officer Pickett notified Bank of America that he had been ordered to 
active duty in Iraq. He served there until January 14, 2010, when he 
returned home with spinal injuries incurred while piloting his 
helicopter during operations.
    July 2009: Bank of America offered Warrant Officer Pickett an 
unsolicited modification to his mortgage with lower monthly payments. 
He began making reduced payments in accordance with the modification 
agreement.
    September 2009: Warrant Officer Pickett's daughter called him in 
Iraq to tell him that a notice had been posted on their front door 
stating that a foreclosure sale had been scheduled for December 7, 
2009. When Warrant Officer Pickett called Bank of America, he was told 
that the modified payments he had been making for three months were 
insufficient under the terms of his original loan.
    October 2009: Bank of America reported Warrant Officer Pickett as 
delinquent to at least one credit bureau. As a result, USAA canceled 
Warrant Officer Pickett's credit card.
    November 2009: Warrant Officer Pickett retained Colonel John Odom, 
an attorney with Jones, Odom, Davis & Politz. Colonel Odom sent letters 
by certified mail to Bank of America and its foreclosure attorneys 
advising them that he was representing Warrant Officer Pickett and that 
his mortgage was protected under the SCRA. Bank of America never 
responded.
    December 2, 2009: With the foreclosure sale scheduled for December 
7, Colonel Odom sent a second letter requesting that Bank of America 
contact him immediately, and he included a written authorization from 
Warrant Officer Pickett for Colonel Odom to act on his behalf. Bank of 
America never responded.
    December 3, 2009: Colonel Odom sent a third letter requesting that 
Bank of America's SCRA Department immediately halt the foreclosure 
sale. An employee from Bank of America's Home Loan Servicing Center 
informed Colonel Odom that his department could not stop the 
foreclosure. Colonel Odom then spoke with a second employee, then a 
third, and then left a voicemail with the bank's SCRA manager.
    December 4, 2009: Colonel Odom spoke with an official in Bank of 
America's SCRA Department who stated that the foreclosure had been 
canceled and that he would provide written confirmation of the 
cancellation to Colonel Odom. Bank of America never provided the 
confirmation.
    December 7 and 11, 2009: Colonel Odom faxed letters to Bank of 
America's SCRA Department seeking confirmation that the foreclosure had 
been canceled. Bank of America did not respond.
    January 2010: Warrant Officer Pickett decided to list his home for 
sale.
    April 6, 2010: Several months later, on April 6, Warrant Officer 
Pickett called Colonel Odom to tell him that his real estate agent 
discovered a second foreclosure sale on his home while performing a 
title search. This foreclosure sale was scheduled for the next day, 
April 7. Colonel Odom immediately called Bank of America, who was 
unable to verify the foreclosure sale. According to a realtor Colonel 
Odom spoke with, tax records indicated that a foreclosure sale had 
indeed been set for April 7, 2010. The foreclosure sale did not go 
forward.
    June 1, 2010: Two months later, on June 1, Warrant Officer Pickett 
sent an e-mail to Colonel Odom stating that his realtor had discovered 
a third foreclosure sale scheduled for two days later, on June 3, 2010. 
Colonel Odom immediately called Bank of America, who claimed that 
Warrant Officer Pickett's account was not being reviewed for 
foreclosure. Colonel Odom spoke with Bank of America's foreclosure 
attorneys, who informed him that Bank of America had indeed scheduled 
the foreclosure sale for June 3, 2010, and that the loan had been in 
foreclosure since September 1, 2009. The foreclosure sale did not go 
forward.
    June 7, 2011: In response to a suit filed against Bank of America 
on behalf of Warrant Officer Pickett for violations of the SCRA, Bank 
of America settled the case for an undisclosed amount.

    B. Army Captain Kenneth Gonzales

    Kenneth R. Gonzales currently serves as a Captain and Medical 
Service Corps Officer in the U.S. Army in San Antonio, Texas, where he 
lives with his wife and four children. From December 2009 to December 
2010, then-Lieutenant Gonzales was deployed to Iraq. During his 
deployment, his mortgage bank, Chase, attempted to foreclose on his 
home in violation of the Servicemembers Civil Relief Act (SCRA). Chase 
also made negative reports to credit bureaus regarding Lieutenant 
Gonzales' mortgage payments, causing his security clearance to be 
suspended. While he was in Iraq, Lieutenant Gonzales contacted the 
Federal Trade Commission and his Senator, Kay Bailey Hutchison. These 
officials reported Chase's actions to the American Bar Association and 
the Office of the Comptroller of the Currency. A year and a half later, 
the foreclosure has been halted and Captain Gonzales' security 
clearance has been reinstated, but the Gonzales family lost several 
months worth of mortgage payments as a result of Chase's actions.

    Timeline

    July 2005: Mr. Gonzales enlisted in the Army and later received his 
commission as Lieutenant.
    November 2008: Lieutenant Gonzales obtained a home mortgage that 
was purchased by Chase.
    November 2009: Lieutenant Gonzales informed Chase that he was being 
deployed to Iraq and began using online access to pay his mortgage.
    December 2009: Lieutenant Gonzales attempted to pay his mortgage 
online from Iraq. Back in Texas, his wife also attempted to pay cash by 
phone. As a result, Chase locked out Lieutenant Gonzales from its 
online payment system for six months. Chase requested that Lieutenant 
Gonzales's wife instead mail money orders, and the bank provided an 
address to submit them.
    January-May 2010: Each month, Lieutenant Gonzales's wife complied 
with Chase's request, went to her bank to obtain money orders, and 
mailed the money orders on time to the address Chase provided.
    February 2010: Chase began reporting late mortgage payments by the 
Gonzales family to credit bureaus. Chase also scheduled a foreclosure 
sale of the Gonzales' home on April 10, 2010. Neither Lieutenant 
Gonzales nor his wife was aware that foreclosure had been initiated or 
that a sale date had been set.
    April 2010: Chase sent a letter to the Gonzales' home asking them 
to call regarding their mortgage. When Mrs. Gonzales called, she was 
told that Chase was unsure why the letter was sent. During this 
discussion, there was no mention of late payments or foreclosure 
proceedings.
    June 2010: When Lieutenant Gonzales was repeatedly denied access to 
Chase's online mortgage payment system, he inquired and soon after 
discovered that Chase had been reporting late mortgage payments to 
credit bureaus. He was also informed that his security clearance had 
been suspended as a result. His mission as one of ten soldiers 
responsible for delivering blood products in Iraq was compromised, and 
his access to information was restricted.
    Lieutenant Gonzales contacted Chase repeatedly from Iraq, but its 
representatives were unwilling to consider that the bank was in error. 
Chase refused to correct the late payment reports to his credit and 
told Lieutenant Gonzales to expect a lawyer's letter demanding the 
repayment of fees associated with the foreclosure. By the end of June, 
Lieutenant Gonzales had not received any letter, and a number given to 
him by Chase for the bank's foreclosure attorney was out of service.
    Lieutenant Gonzales took a number of affirmative steps from Iraq to 
address the situation. He filed a complaint with the Federal Trade 
Commission regarding Chase's mortgage practices, and he contacted his 
Senator, Kay Bailey Hutchison.
    July 2010: Senator Hutchison sent a letter to the Department of 
Defense requesting assistance with Lieutenant Gonzales's case. She also 
contacted the Office of the Comptroller of the Currency regarding 
Chase's actions.
    August-November 2010: An officer with the Legal Assistance Policy 
Division of the Army's Judge Advocate General (JAG) repeatedly faxed an 
authorization to Chase from Lieutenant Gonzales indicating that she was 
acting on his behalf. Chase officials told her it would take 48 to 72 
hours to confirm receipt of the authorization, but they claimed 
repeatedly that they never received her faxes and would not accept e-
mail.
    The JAG officer reported Chase to the American Bar Association, 
which contacted a Senior Vice President at Chase. This official 
immediately arranged to remove the erroneous late payments on 
Lieutenant Gonzales's credit report. A Chase official admitted to the 
JAG officer that the original authorization she faxed on Lieutenant 
Gonzales's behalf indeed had been received on the first day she sent 
it.
    May 2011: Lieutenant Gonzales was promoted to Captain, and his 
security clearance was reinstated. However, Chase claimed that it 
``misplaced'' the five money orders sent in by Mrs. Gonzales from 
January through May 2010. Mrs. Gonzales was able to recover three of 
the five receipts for the money orders, but the remaining two receipts 
were never located. Due to Chase's actions, the Gonzales family had to 
pay two months worth of mortgage payments twice.

VI. EFFORTS BY RANKING MEMBER CUMMINGS TO INVESTIGATE
    From the outset of the 112th Congress, Representative Elijah E. 
Cummings, the Ranking Member of the House Committee on Oversight and 
Government Reform, has sought a comprehensive investigation into abuses 
by mortgage servicing companies, including an examination of illegal 
foreclosures against servicemembers. To date, he has sent four letters 
to Representative Darrell E. Issa, the Chairman of the Committee, but 
Chairman Issa has declined to seek any information from mortgage 
servicing companies relating to these abuses.
    On December 21, 2010, Ranking Member Cummings sent his first letter 
to Representative Issa in his new role as Chairman. Ranking Member 
Cummings requested that Chairman Issa make investigating foreclosure 
abuses one of the Committee's top priorities in the 112th Congress. 
\36\
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    \36\ Letter from Ranking Member Elijah E. Cummings to Chairman 
Darrell E. Issa (Dec. 21, 2010) (online at 
democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5175&Itemid=49).
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    On February 25, 2011, Ranking Member Cummings sent a second, more 
detailed letter to Chairman Issa setting forth specific evidence of 
widespread abuses by mortgage servicing companies and outlining steps 
the Committee should take to investigate. This letter included specific 
information about illegal foreclosures against servicemembers and asked 
Chairman Issa to issue document requests to the nation's top ten 
mortgage servicing companies. \37\
---------------------------------------------------------------------------
    \37\ Letter from Ranking Member Elijah E. Cummings to Chairman 
Darrell E. Issa (Feb. 25, 2011) (online at 
democrats.oversight.house.gov/images/stories/Correspondence/
Foreclosure%20Letters/Cummings%20Letter%20to%20Issa.pdf)
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    When Chairman Issa declined to send these document requests, 
Ranking Member Cummings sent them himself, requesting that the ten 
mortgage servicing companies produce documents relating to allegations 
of wrongful foreclosures, inflated fees, and other abusive practices. 
\38\
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    \38\ See, e.g., Letter from Ranking Member Elijah E. Cummings to 
Raymond D. Fortin, General Counsel, SunTrust Banks Inc. (Feb. 25, 2011) 
(online at democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5229&Itemid=49).
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    On May 24, 2011, Ranking Member Cummings wrote a third letter to 
Chairman Issa, reporting that several mortgage servicing companies 
refused to provide documents in response to his previous requests. As a 
result, Ranking Member Cummings requested that Chairman Issa issue 
subpoenas to those mortgage servicing companies. \39\
---------------------------------------------------------------------------
    \39\ Letter from Ranking Member Elijah E. Cummings to Chairman 
Darrell E. Issa (May 24, 2011) (online at 
democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5315&Itemid=49).
---------------------------------------------------------------------------
    On June 21, 2011, Ranking Member Cummings wrote a fourth letter to 
Chairman Issa, marking the six-month anniversary of his first letter 
requesting the investigation. He provided additional information 
regarding abuses by mortgage servicers and reiterated his request for 
subpoenas for documents relating to illegal foreclosures, inflated 
fees, and other abuses. He wrote:

    If mortgage servicing companies are allowed to disregard requests 
for documents that are integral to this investigation, the Committee's 
integrity will be called into question and, more importantly, abuses 
may continue. \40\
---------------------------------------------------------------------------
    \40\ Letter from Ranking Member Elijah E. Cummings to Chairman 
Darrell E. Issa (June 21, 2011) (online at 
democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5350&Itemid=49).

                                 
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