Hearing focuses on challenges active troops and veterans face

The financial challenges of active military and veterans took center stage Tuesday during a congressional hearing on efforts to improve consumer protection for the military community.

In front of a capacity audience, senators on the Committee on Banking, Housing and Urban Affairs spoke with officials about the struggles service members face, particularly with home mortgage payments and apartment leases.

“It is important to remember that military consumers differ from other consumers,” said Sen. Tim Johnson, South Dakota Democrat and the committee’s chairman. “The military lifestyle requires frequent relocations, forcing spouses to find new employment and families to sell their homes.

“[Service members] must be certain that family members have appropriate access to family finances in order to handle financial needs in their absence.”

Holly Petraeus, the assistant director of the Consumer Financial Protection Bureau, said housing remains a problem for service members across the country, noting that the housing crisis affected many of the states with the most military bases.

Even so, Mrs. Petraeus highlighted a decision made last week by the Federal Housing Finance Authority which will offer some solace to military families with an “underwater” home - property with a mortgage higher than its current value. The decision allows any active-duty service member being permanently restationed to escape payments on the property. The property is put up for a short sale, and the family is not held liable for additional mortgage costs.

“In recent years, a number of service members have seen no viable alternative but to leave their family in their ‘underwater’ house and go alone to their new duty station, which may mean a separation of three years or more,” said Mrs. Petraeus, the wife of retired Gen. David H. Petraeus, who commanded U.S. forces in Iraq and Afghanistan and is now director of the CIA.

“I am hopeful this new guidance will change that.”

The hearing also addressed ongoing violations of the Servicemembers Civil Relief Act (SCRA), a law last amended in 2003 that guards active military from the stress of financial burdens. Sen. Jack Reed, Rhode Island Democrat and a panel member, proposed a series of amendments last month to close loopholes in the act and improve its enforcement.

One of Mr. Reed’s amendments would prohibit landowners from charging military members a fee for breaking an apartment lease in order to live on a base. SCRA currently protects members of military who are being deployed from lease penalties, but not those on waiting lists for on-base housing.

Another proposal would grant the spouse of a deceased service member nine months of foreclosure protection following the death of their partner. Currently, the law gives service members and their families nine months of foreclosure protectionafter a return from an overseas deployment.

Mr. Reed’s bill is currently before the Senate Committee on Veterans’ Affairs.

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