Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mrs. MURRAY. Mr. President, I have often said when our nation sends men and women to war we commit to taking care of them when they return home. We also promise them important legal protections to allow them to focus on their mission and in recognition that while they are deployed or away from home servicemembers often do not have the resources to respond to a range of financial and legal issues. Despite these protections, too many servicemembers have been cheated on their student loans, on their mortgages, and on their credit cards.

When our men and women in uniform are serving our country, they should not have to worry about whether our government is going to hold up its end of the bargain and fulfill its responsibilities to them.

So today I introduce the SCRA Enhancement and Improvement Act of 2016, which will put an end to many of these predatory practices and give servicemembers and the government the tools they need to fight back when banks and student loan servicers deny servicemembers their rights.

In 2014, I learned of allegations that at least one major student loan servicer had been overcharging men and women in uniform on their student loans while they were on active duty. That's unacceptable. One servicemember overcharged on their student loans is one too many.

That is why this bill will end the unfair and improper practices of student loan servicers by requiring them to automatically apply the Servicemembers Civil Relief Act, SCRA, interest rate cap, respond within 14 days to any request for SCRA protections, and provide a full explanation any time they deny an SCRA protection, along with clear instructions on how to remedy the situation so the servicemember can receive that protection. It will also require student loan servicers to have a designated service representative or point of contact for servicemembers and ensure these individuals are properly trained on the needs of servicemembers, how the military operates, and the protections required by SCRA, the Higher Education Act, and other laws.

The bill will hold servicers accountable for their conduct and treatment of servicemembers by requiring them to retain all communications with servicemembers so we can conduct thorough oversight.

The SCRA Enhancement and Improvement Act will also hold the Department of Education accountable for enforcing standards and the law with its student loan servicers. Following numerous allegations of servicemembers being mistreated by student loan servicers who were not complying with the SCRA interest rate caps, and at least 69,000 servicemembers who were overcharged by one Federal contractor, I asked the Department to review how many servicemembers had been improperly denied their benefits under SCRA. Shockingly, the Department told us that the servicers were complying in the ``vast majority of cases.'' This was inconsistent with what the Department of Justice and the Consumer Financial Protection Bureau had found.

I wrote to the Department of Education's Inspector General and asked her to review the Department's findings. Two weeks ago the IG released their report, and it showed that instead of doing a thorough investigation to find out exactly how many servicemembers may have been overcharged on their student loans, the Department's review was riddled with errors and papered over mishandling of military borrowers' loans.

The bill I am introducing today will require sufficient notice to be given when a loan is transferred or sold, and that all benefits or protections for the servicemember are seamlessly transferred to the new loan servicer. It will also forgive all Federal and private student loan debt in the event the servicemember dies in the line of duty.

The SCRA Enhancement and Improvement Act also expands protections beyond student loans. I was concerned when several years ago some of the nation's largest mortgage servicers improperly overcharged and foreclosed upon deployed servicemembers in violation of the SCRA. Thousands of servicemembers and veterans were wronged over several years. After those allegations came to light, and after the Department of Justice reached a settlement with those mortgage servicers, GAO released a report in 2014 looking at the importance of mortgage and foreclosure protections in the SCRA. The results were concerning, especially when they found at one mortgage servicer that 82 percent of loans that would have benefitted from the SCRA's interest rate cap still had rates in excess of 6 percent.

This bill would reduce the interest rate cap to three percent to provide meaningful protection to servicemembers, including a zero percent cap for servicemembers eligible for hostile fire or imminent danger pay. It would expand the SCRA interest rate protection to all of a servicemember's debt regardless of when it was incurred, in order to cover consolidation loans and in recognition that the same challenges exist for military borrowers regardless of when a debt was first incurred. It would also strengthen the protections that prevent judgements against a servicemember who cannot appear in court because of military service.

As the daughter of a World War II veteran, I know how much our military families sacrifice on behalf of their country. So I believe protecting our military men and women from predatory practices is an absolutely essential commitment we make to them. We will not allow our servicemembers to be taken advantage of.

Finally, as we have seen too often, these protections are only as good as our ability to enforce the law and hold people accountable. The SCRA Enhancement and Improvement Act will give servicemembers, the Department of Justice, and the Consumer Financial Protection Bureau the legal and oversight tools they need to hold entities accountable. It would clarify that servicemembers may bring a private right of action to enforce their rights and make arbitration clauses unenforceable unless all parties agree after a dispute arises. The bill will give the Attorney General the authority to issue civil investigative demands in SCRA investigations. It would double the fines against parties found to be violating the protections afforded by the SCRA.

With the number of Federal entities involved, it is essential the departments and agencies work collaboratively to protect servicemembers. The Defense Department must ensure it is providing clear, useful information to servicemembers on their rights and how to invoke them, and that the training stays current. I especially commend the Consumer Financial Protection Bureau for its dedicated work on behalf of our men and women in uniform.

Our servicemembers deserve better than what they have gotten over the last several years. The SCRA Enhancement and Improvement Act will go a long way to ensuring our servicemembers are protected, putting a stop to the predatory practices of banks and student loan servicers, and change the apathy that has characterized the Department of Education's oversight. I encourage all of my colleagues to support this legislation. ______

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