Banks reminded on military personnel protections
The recently-tapped head of military issues for the new Consumer Financial Protection Bureau, sent a letter to the nation's 25 largest banks Tuesday urging them to comply "with important legal protections for military personnel."
Holly Petraeus, wife of Gen. David H. Petraeus, the top American military commander in Afghanistan, pointed the firms to the Servicemembers Civil Relief Act, which limits the interest rates that banks can charge those in the military and prevents them from foreclosing on homes of active duty service members without a judge's expressed authorization and a formal hearing where the homeowner is represented.
The letter comes on the heels of reports that some banks have violated those provisions, including an acknowledgment last month by J.P. Morgan Chase that the firm had foreclosed on more than a dozen active-service families and overcharged thousands of others. The bank said it would refund a total of about $2 million to overcharged families.
"In view of recent experience, I would urge you 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," Petraeus wrote in Tuesday's letter to banking executives.
She also wrote separately to J.P. Morgan Chase chief executive Jamie Dimon, thanking him for "reaching out to me personally" and adding, as she had to other executives, "I appreciate your assistance in ensuring that your bank does not overlook its obligations -- legal and otherwise -- to your military customers."
Elizabeth Warren, the Harvard law professor helping to set up the new consumer watchdog, appointed Petraeus to the post early last month. The two women recently traveled to Lackland Air Force Base in Texas to meet with military families about financial readiness issues.
| February 1, 2011; 7:35 PM ET
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