[Congressional Record Volume 151, Number 91 (Friday, July 1, 2005)]
[Extensions of Remarks]
[Page E1433]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          MILITARY PERSONNEL FINANCIAL SERVICES PROTECTION ACT

                                 ______
                                 

                               speech of

                             HON. JIM DAVIS

                               of florida

                    in the house of representatives

                         Tuesday, June 28, 2005

  Mr. DAVIS of Florida. Mr. Speaker, earlier this week, the House 
passed H.R. 458, the Military Personnel Financial Services Protection 
Act. This important piece of legislation prevents the sale of abusive 
insurance and investment products, such as contractual plans, to 
military personnel.
  Contractual plans, which have all but disappeared from civilian 
markets, offer individuals the opportunity to invest small amounts of 
money on a regular basis over an extended period of time. Generally, 
these contractual plans require that investors make monthly 
installments for a period of 15 to 20 years and charge up front the 
commission that would be expected over the life of the contract. 
Because these plans require that commission fees be paid in the first 
few years of the contract, the investor's account is not fully credited 
during this period. Furthermore, investors who drop out of these plans 
before the designated end of the contract sacrifice all the prepaid 
commission and often find that the number of shares they own is 
considerably less than what they could have purchased directly.
  A series of articles in the New York Times highlighted the abusive 
sale of these financial products to members of the Armed Services. 
While most financial service providers supply their military customers 
with honest and accurate information, some have engaged in unfair and 
deceptive practices in an effort to increase their own profits. The men 
and women who defend our country deserve better.
  I supported H.R. 458 because it ensures that our troops are protected 
from the potentially abusive sales of certain financial products. By 
enacting new regulations and prohibiting the sale of mutual funds sold 
though contractual plans, H.R. 458 provides military personnel with the 
proper assurances they need to make informed financial decisions.

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