[Congressional Record Volume 151, Number 93 (Tuesday, July 12, 2005)]
[Extensions of Remarks]
[Page E1464]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          MILITARY PERSONNEL FINANCIAL SERVICES PROTECTION ACT

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                               speech of

                            HON. DAVID SCOTT

                               of georgia

                    in the house of representatives

                         Monday, June 27, 2005

  Mr. SCOTT of Georgia. Mr. Speaker, today, I rise in support of Title 
II of, H.R. 458 Military Personnel Financial Services Protection Act. 
Title II of this measure regulates lenders who target the military and 
safeguards our armed services personnel from unscrupulous consumer 
credit lending and collection practices.
  Many lenders have developed sales campaigns to market directly to 
military personnel. A few unscrupulous agents have made misleading 
pitches to `captive' audiences, by posing as counselors on veteran's 
benefits and soliciting soldiers while they were on duty. In some 
instances, lenders have garnished military personnel's wages or 
required them to agree to have their loan repaid through the allotment 
system. Title II of H.R. 458 would clarify that lenders cannot garnish 
a military salary or give the appearance that they are agents of the 
military.
  Predatory lenders have contacted or threatened to contact the 
borrower's commanding officer in order to collect debt. In addition, 
some lenders have required borrowers to sign documents as a condition 
of obtaining the loan that purportedly waive their legal rights, 
including requiring the borrower to submit to mandatory arbitration of 
any dispute. H.R. 458 would prohibit a lender to contact a loan 
recipient's chain of command and the measure would ensure that the 
customer's rights are not waived.
  Title II in H.R. 458 recognizes that many military personnel are not 
aware of their borrowing options or rights or how to manage their 
finances after taking out a loan. To remember this problem, under Title 
II, military lenders would be required to provide detailed disclosures 
prior to the consummation of a loan transaction.
  Last year, as a member ofthe House Committee on Financial Services, I 
expressed concerns about unscrupulous military lenders in several 
hearings. Some of these reported scams occurred at Fort Benning in my 
state of Georgia and were made public through a series of articles in 
the New York Times.
  Mr. Speaker, I believe that Title II of H.R. 458 takes strong steps 
to ensure that our military men and women are not treated as second-
class citizens when it comes to financial transactions and loans.

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