WHITE HOUSE FACT SHEET ON BUILDING A BETTER FINANCIAL SYSTEM AND PROTECTING CONSUMERS

FROM:  THE WHITE HOUSE
March 26, 2015

FACT SHEET: Progress Toward Building a Safer, Stronger Financial System and Protecting Consumers from Unfair and Abusive Practices

Today, the President is in Birmingham, Alabama to speak about the progress we have made to build a safer and stronger financial system and to protect families from the types of abuses that led the economy to near collapse – and his commitment to safeguarding that progress.

Before the financial crisis, the irresponsibility and recklessness that was allowed to prevail on Wall Street may have seemed remote from Main Streets across the country. But we know now that was not the case. One of the most critical components of the Wall Street Reform bill passed by Congress in 2010 and signed by the President was the creation of the Consumer Financial Protection Bureau (CFPB), a dedicated, independent cop on the beat with the single goal of protecting consumers from threats like abusive practices of unscrupulous lenders or the fraudulent practices of debt collectors. Today, in another example of how crucial Wall Street Reform protections are for Main Street families, the CFPB has announced they are taking an important first step toward writing rules to help prevent abuses in payday lending and protect consumers from getting trapped in expensive cycles of debt and fees.

Apart from the work of the CFPB, the Obama Administration has continued its broader fight to protect consumers. In the last year alone, President Obama has announced steps to crack down on conflicts of interest in retirement investment advice that are costing middle class families billions of dollars every year, to put in place a bill of rights for students borrowing for college, and to provide proactive mortgage payment relief for active duty servicemembers and their families.

Yet even as the President and the CFPB continue to take action on behalf of consumers, Congressional Republicans are advancing budget plans and legislation this week designed to limit the ability of the CFPB to do its job and to undermine other crucial reforms. The Republican budgets risk returning us to the days of “too big to fail,” protecting Wall Street firms from important regulatory safeguards and putting ordinary citizens and the economy at risk. These measures are part of a broader effort by Wall Street lobbyists, special interest groups, and their Republican allies in Congress to roll back the progress we have made in creating a safer financial system that supports the middle class.

We cannot let Republicans in Congress undo the progress we’ve made by unraveling Wall Street Reform. These reforms have made our financial system dramatically safer by curbing the reckless practices that helped precipitate the crisis and have delivered substantial benefits to consumers. Wall Street Reform has built a stronger and more stable foundation for economic growth. That’s why the President is reiterating today the message he delivered in the State of the Union: if Congress sends him a bill that unravels the new rules on Wall Street, he will veto it.

Progress from the Consumer Financial Protection Bureau

Prior to the creation of the CFPB as an independent agency, there was no single agency that had all the tools and the mandate to oversee consumer financial products and services that Americans rely on every day. Even though many payday and similar lenders trap consumers in cycles of debt, too often these lenders have escaped regulation. But today, the CFPB is stepping up to help address this problem and better protect affected consumers, yet another example of how Wall Street Reform is delivering real results for working families.

Taking Action on Payday Lending

Problems Continue in Payday Lending: While marketed as a tool to meet consumers’ short-term credit needs, payday loans—and loans with similar structures like title loans or other installment loans—often trap families in an abusive and expensive cycle of debt and fees. Eighty percent of payday loans are rolled over or followed by another loan within 14 days, and the average borrower stays in debt for about 200 days out of the year.

As a Result of Wall Street Reform, an Independent Consumer Watchdog Can Now Take Action on Payday Lending: The CFPB is the first Federal regulator empowered to write rules that curb the abusive activities of payday lenders, and under that authority, today announced that it was considering proposing new rules that would end payday debt traps. The CFPB has made clear it recognizes the need for affordable small dollar credit while creating reasonable safeguards so that consumers are treated fairly and do not face an unsustainable debt cycle. The CFPB’s approach could serve as a Federal floor with states around the nation continuing to tailor their regulation of payday and similar loans as they see fit to meet the needs of their constituents.              

The CFPB’s Continuing Record of Action

Since its creation as an independent agency, the CFPB has taken bold action in a number of important areas, providing a total of $5.3 billion in relief through enforcement actions to more than 15 million consumers who were harmed, and setting stronger rules of the road that prevent abuse in credit card, debt collection, student loan servicing, and mortgage lending markets. Following are some examples of how the CFPB is delivering for middle class and working families:

Cracked Down on Fraudulent Credit Card Practices: The CFPB has cracked down on costly and often unneeded credit card add-on products like identity protection and disability insurance, bringing enforcement actions that resulted in over $1 billion returned to millions of consumers signed up for products without their knowledge or paying for services they did not receive.

Prohibited Abusive Mortgage Lending: The CFPB has implemented significant mortgage lending reforms to address the actions and products that hurt so many homeowners during and after the financial crisis. For example, lenders are now prohibited from offering mortgages that borrowers cannot repay, must use significantly improved mortgage disclosures that make products easier to understand, and must limit high fees and abusive payment structures. The CFPB has also created national mortgage servicing standards, established clear rules of the road for borrowers, and put in place pro-consumer restrictions for mortgage servicers.

Created New Protections for Student Loan Borrowers: The CFPB has set up a complaint database for borrowers and launched oversight of student loan servicers. The CFPB and the Department of Education also initiated complementary enforcement actions against for-profit colleges that engaged in predatory or deceptive student loan practices, winning loan forgiveness for thousands of students.

Established Rules for Remittances Abroad: The CFPB has established rules making it easier for people who send money abroad to compare prices and ensure that all the money they send reaches its destination.

Penalized Discriminatory Auto Lending Practices: The CFPB has assessed $18 million in penalties and returned $80 million to consumers who were victimized by auto loan programs which resulted in higher interest rates being charged because of a borrower’s race or national origin.

Protected Military Service Members from Abusive Practices: The CFPB has secured more than $1 million in restitution through 2014 for military service members, veterans, and their families based on over 14,000 complaints the Bureau received.

Created a System for Handling Consumer Complaints: The CFPB has received more than 540,000 consumer complaints about financial products and services since it began processing complaints in 2011, including 240,000 complaints in FY2014.  And this month, the CFPB announced that it will give consumers the choice to publicly share their personal financial complaint narratives with others through the Bureau’s complaint database, so consumers can learn from one another.

Building a Broader Record of Consumer Protection:

Apart from CFPB’s efforts, the Administration has taken a broad set of steps to fight to protect consumers from the abuses that led to the financial crisis. In the last year alone, President Obama:

Announced Steps to Crack Down on Conflicts of Interest That Sap Retirement Accounts: Last month, the President announced steps to crack down on backdoor payments and hidden fees that incentivize retirement advisers to recommend bad investments with high costs and low returns. These conflicts of interest sap away families’ hard earned dollars from their retirement accounts, costing working and middle-class families approximately $17 billion in losses each year. The Department of Labor is planning to issue a Notice of Proposed Rulemaking requiring retirement advisers to abide by a “fiduciary” standard—putting their clients’ best interest before their own profits.

Rolled Out A New Student Aid Bill Of Rights: This month the President underscored his vision for a quality, affordable education for all Americans through a new Student Aid Bill of Rights. Among the new actions, the President signed a Presidential Memorandum directing the Department of Education to work across the federal government to do more to help borrowers afford their monthly loan payments including by: creating a responsive student complaint system to ensure quality customer service and accountability for the Department of Education, its contractors, and colleges; requiring enhanced disclosures and stronger consumer protections for student loan borrowers; establishing a centralized hub for all federal student loan borrowers in repayment to access account and payment processing information; and ensuring fair treatment for struggling and distressed borrowers.

Provided Proactive Payment Relief to Active Duty Military and Their Families: The Administration has partnered with five large financial institutions to proactively offer interest rate reductions on their mortgage loans to active duty military and their families. Active duty military are entitled to this benefit under the 2003 Servicemembers Civil Relief Act (SCRA) but only if they request it and jump through hoops by providing unnecessary paperwork and documentation, which many of them do not. The President launched a coordinated effort across government to cut regulatory red tape, allowing participating lenders to proactively identify and reach out to our active duty service members to enroll them in these important financial protections.

Secured Billions in Penalties and Fines from Banks for their Involvement in the Mortgage Crisis:  The Department of Justice (DOJ) secured billions from the country’s largest financial services institutions as a result of civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of Residential Mortgage-Backed Securities (RMBS), collateralized debt obligations (CDOs), and the banks’ practices concerning the underwriting and origination of mortgage loans.  A large portion of these settlements will be set aside as aid for hundreds of thousands of homeowners and other consumers harmed by the financial crisis precipitated in part by Wall Street’s unlawful conduct.

Protecting the Progress We’ve Made in Reforming Wall Street

The President’s Wall Street Reforms have made our financial system safer and stronger by limiting the excess risks and reckless practices that caused the crisis, providing substantial benefits to families, communities, and the broader economy.

Wall Street Reform has built a stronger and more stable foundation for economic growth and ended the worst of the practices that contributed to the financial crisis, such as curbing predatory lending and closing regulatory gaps.
Wall Street Reform has made our financial system safer and more resilient by curbing excessive risk-taking by financial institutions. Banks have added over $500 billion of capital to cushion against unexpected losses and reduce overall leverage.
These reforms benefit Main Street by providing businesses—large and small—with more stable access to credit to fund expansion, make payrolls, and help create jobs. Business lending is up by more than 50 percent since its post-crisis low.
These reforms also benefit middle-class families through new investor protections that will make it safer to invest and grow their savings, including through strengthened enforcement authorities for market regulators and enhanced disclosure requirements.
Yet, even as the President continues to work to build on this progress, Republicans in Congress are seeking to undermine it through attacks on Wall Street Reform. Given how far we have come since the crisis, it is hard to understand the efforts of some to undermine our ability to protect consumers, investors, and taxpayers from excessive risks taken by financial institutions. The Administration is willing to consider reasonable reforms that make the law work better and supports efforts by regulators to tailor rules to apply only where they should. But we cannot let Republicans take us back to the way things were before the crisis. Here are a few concerning ways that Wall Street lobbyists, the special interests, and their Republican allies in Congress are seeking to undermine these critical reforms:

Undermining the Consumer Financial Protection Bureau: Despite the CFPB’s progress, Republicans have consistently stood with Wall Street lobbyists and the special interests over middle class families by seeking to limit the power of the CFPB through proposals to replace its director with a five-member panel, limiting the Bureau’s ability to respond effectively to rapid changes in the financial services market, place additional procedural burdens on its rulemaking and data collection processes, and eliminate the fund that the CFPB uses to compensate consumers who have been the victims of fraudulent and deceptive practices. Just this week, Congressional Republicans are advancing budget plans and legislation designed to severely limit the ability of the CFPB to do its job of protecting consumers, among other things. The Administration will not allow Republicans to undermine the important work of the CFPB.

Using Small Lender Relief to let Big Banks Off the Hook: Small lenders play a vital role in their communities and the Administration supports tailoring regulations where appropriate, but we cannot allow measures that purport to help community banks be a back door to undermine reform, letting big banks take excessive risks like they took before the crisis.

Putting Roadblocks in the Way of Bringing the Financial System Under Stronger Regulatory Oversight and Supervision: Republicans in Congress are attempting to hobble financial overseers and independent watchdogs that are keeping an eye on risks in big banks and nonbank financial companies. Standing in the way of these independent watchdogs makes it tougher to catch and prevent the next threat to financial stability.

Sending us Back to the Days of “Too Big to Fail”: In the heart of the financial crisis, regulators needed to deal with faltering firms such as Lehman Brothers, Bear Stearns, and AIG but lacked the ability to wind them down in an orderly manner without damaging the broader financial system. Orderly liquidation authority—in “Title II” of Dodd-Frank—is a critical emergency tool for resolving firms in an orderly manner, when the failure of a firm could threaten the financial stability of the United States and only when bankruptcy is not an effective option. We cannot accept proposals that would roll back the very tools needed to allow any firm, no matter how large and complex, to fail without harming the economy.

DETROIT-BASED ALLY BANK RESOLVES ALLEGATIONS OF LENDING DISCRIMINATION

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, December 20, 2013

Justice Department and Consumer Financial Protection Bureau Reach $98 Million Settlement to Resolve Allegations of Auto Lending Discrimination by Ally
Settlement Is Department’s Third Largest Fair Lending Agreement Ever and Largest Ever Auto Lending Agreement

The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced the federal government’s largest auto loan discrimination settlement in history to resolve allegations that Detroit-based Ally Financial Inc. and Ally Bank have engaged in an ongoing nationwide pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in their auto lending since April 1, 2011.  The agreement is the first joint fair lending enforcement action by the department and CFPB.  With this agreement, eight of the top 10 largest fair lending settlements in the department’s history have been under Attorney General Eric Holder’s leadership.

The settlement provides $80 million in compensation for victims of past discrimination by one of the nation’s largest auto lenders and requires Ally to pay $18 million to the CFPB’s Civil Penalty Fund.  Ally also must refund discriminatory overcharges to borrowers for the next three years unless it significantly reduces disparities in unjustified interest rate markups.  This system will create a strong financial incentive to eliminate discriminatory overcharges.

“With this largest-ever settlement in an auto loan discrimination case, we are taking a firm stand against discrimination in a critical lending market,” said Attorney General Eric Holder.  “By requiring Ally to provide refunds to those who are overcharged because of their race or national origin, this agreement will ensure relief for Americans who are victimized. It will enable the Justice Department and the CFPB to work closely with Ally and others to prevent discriminatory practices in the future. And it will reinforce our determination to respond aggressively to discrimination in America’s lending markets – wherever it is found.”

The settlement resolves claims by the department and the CFPB that Ally discriminated by charging approximately 235,000 African-American, Hispanic and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers.  The agencies claim that Ally charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.  The average victim paid between $200 and $300 extra during the term of the loan.  The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending.  Ally’s settlement with the DOJ, which is subject to court approval, was filed today in the U.S. District Court for the Eastern District of Michigan in conjunction with the DOJ’s complaint.  Ally resolved the CFPB’s claims by entering into a public administrative settlement.

“Discrimination is a serious issue across every consumer credit market,” said CFPB Director Richard Cordray. “We are returning $80 million to hard-working consumers who paid more for their cars or trucks based on their race or national origin. We look forward to working closely with the Justice Department and Ally to make sure this serious issue will be addressed appropriately in the years ahead as well.”

Rather than taking applications directly from consumers, Ally makes most of its loans through over 12,000 car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Ally.  Ally’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Ally initially sets based on the borrower’s objective credit-related factors.  Dealers receive greater payments from Ally on loans that include a higher interest rate markup.  The coordinated investigations by the department and the CFPB that preceded today’s settlement determined this system of subjective and unguided pricing discretion directly results in Ally’s qualified African-American, Hispanic and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers.

The agencies claim that Ally fails to adequately monitor its interest rate markups for discrimination or require dealers to document their markup decisions.  Ally’s first effort to monitor for discrimination in interest rate markups began only earlier this year after it learned of the CFPB’s preliminary findings of discrimination, and resulted in only two dealers being sanctioned and subjected to nothing more than voluntary training.

“This settlement provides relief to those who were harmed by this discrimination,” said U.S. Attorney for the Eastern District of Michigan Barbara McQuade.  “Lenders must consider an individual borrower’s credit worthiness, based on income, savings, credit history and other objective factors when determining the terms of a loan.  This settlement will ensure that in the future, borrowers will be able to obtain loans from Ally based on their own credit history free from discrimination based on race or national origin.”

Today’s settlement represents the first resolution of the department’s joint effort with the CFPB to address discriminatory auto lending practices.  The 2010 Dodd-Frank Act gave both the DOJ and the CFPB authority to take action against large banks like Ally for violating the ECOA.  Although the department has filed previously filed lawsuits alleging violations of ECOA involving car loans, today is the first ECOA lawsuit against an auto lender that operates nationwide.

In addition to the $98 million in payments for its past conduct and requirement to refund future discriminatory charges, the settlement requires Ally to improve its monitoring and compliance systems.  The settlement allows Ally to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results.  The department commends Ally for working cooperatively to reach an appropriate resolution of this case.  The department looks forward to Ally’s commitment, as part of the settlement, to work with the Civil Rights Division and the CFPB to find improved ways to fairly charge all consumers while also fairly compensating auto dealers for the services they provide.

The department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 30 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $775 million in monetary relief for impacted communities and more than 535,000 individual borrowers.

The settlement provides for an independent administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Ally’s discrimination.  The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available.  Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.  Individuals who have auto loan questions or would like to submit a complaint can contact the CFPB at (855) 411-2372.

The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Michigan and the CFPB are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

FDIC ALERTS CONSUMERS TO NEW PROTECTIONS FROM RISKY LOANS

FROM:  FEDERAL DEPOSIT INSURANCE CORPORATION 
December 12, 2013

For anyone thinking about buying a home or shopping for a mortgage, the Fall 2013 issue of FDIC Consumer News features an overview of important rules taking effect soon that are intended to protect consumers from risky loans. The coverage includes practical tips when shopping for a loan and for avoiding mortgage scams. Additional articles offer suggestions on options to consider if an institution turns you down for an account based on a report of a previously closed checking or savings account, as well as information on using a financial institution's social media site to communicate or conduct business with a bank. Here's an overview of this issue, which also marks the 20th anniversary of the FDIC newsletter:

New mortgage rules: Important new rules from the Consumer Financial Protection Bureau, which will implement provisions of the 2010 Dodd-Frank financial reform law, are primarily intended to ensure that consumers are not encouraged by a lender or loan broker to take a mortgage that they don't have the ability to repay. Other provisions will help consumers do a better job of protecting themselves during the loan origination process. Most of the new rules will take effect on January 10, 2014.

Mortgage scams: FDIC Consumer News is reminding mortgage borrowers to watch out for scammers who falsely claim to be lenders, loan servicers, financial counselors, representatives of government agencies or other professionals wanting to "help" fix loan payment problems. The newsletter presents common warning signs of fraudulent offers.

If you're turned down for a checking account: Certain "consumer reporting" companies can legally collect information from financial institutions on aspects relating to a consumer's checking account, such as the reasons an account was closed. And just as a negative credit report can hurt someone's ability to borrow from a financial institution, a checking history that shows a closed account because of unpaid overdrafts or other mismanagement can hurt that person's ability to open a new account. FDIC Consumer News offers suggestions for consumers who are unable to open a new account, including the importance of reviewing a copy of the report and disputing errors.

Using financial institutions' social networking sites: Many people interact with businesses on social media sites such as Facebook, Google+ and Twitter. Banks are also using social media to advertise their products and services, obtain consumer feedback and, in some cases, provide a gateway for customers to access their accounts. There can be consumer benefits, including finding out about new products or special offers more quickly, but users also need to be careful, such as by protecting personal, confidential or account information in their posts.

DANGERS OF PREDATORY LENDING

FROM:  U.S. NAVY
YOKOSUKA, Japan (April 4, 2012) Thanh Ly-Turnbull, a personal financial manager at the Fleet and Family Support Center at Commander, Fleet Activities Yokosuka, presents a class on creating a spending plan at the community readiness center. Five classes will be presented by the center this month as a part of Financial Literacy Month. (U.S. Navy photo by Mass Communication Specialist 3rd Class Andrew Ryan Smith/Released) 

Know the Dangers of Predatory Lenders 
By Mass Communication Specialist 3rd Class Andrea Perez, Navy Personnel Command Public Affairs
MILLINGTON, Tenn. (NNS) -- With the high cost of the summer vacation season right around the corner, Consumer Financial Protection Bureau (CFPB) leaders remind Sailors to be wary of predatory lending practices.

According to Holly Petraeus, assistant director of the CFPB Office of Service Member Affairs, the number of service members affected by predatory lending acts is hard to measure.

"It can be embarrassing to go and tell somebody that you got ripped off," said Petraeus. "It's so common for Sailors to walk into [a financial counselor] with significant financial problems that unfortunately have gotten really severe by the time they walk in and ask to see a counselor."

Predatory loans are usually small, short-term arrangements designed to bridge cash-strapped borrowers until their next paycheck. However, they are expensive, high-interest loans that often cost $10 to $44 dollars per week per $100 dollars borrowed, plus fees. If a loan is not paid at the original payment due date and rolled-over multiple times, it can lead to a situation where most Sailors cannot pay off the loan.

Financial difficulties can threaten a service member's security clearance and career. Petraeus said addressing financial issues openly can work to a Sailor's advantage.

Petraeus recently met with Mid-South and Navy Personnel Command (NPC) leadership and spoke to Sailors about how to make informed consumer decisions.

She discussed the Military Lending Act, which provides some protection for active-duty service members, active National Guard or Reserve personnel, and their dependents against the type of predatory loans that are commonly found outside the gates of bases.

Petraeus said service members may appeal to predatory lenders because they have a guaranteed source of income.

"The Military Lending Act caps payday loans, auto title loans, and tax refund anticipation loans to military on active duty and their dependents at an annual rate of 36 percent," said Petraeus. "That sounds high, I know, but the average payday loan is actually about 390 percent."

The Military Lending Act defines payday loans as loans of closed-end credit, 91 days or less, and less than $2,000 dollars. It defines auto title loans as loans of closed-end credit that are 181 days or less.

"The problem...is that some folks have just changed the definition of their product enough to get outside of that law," said Petraeus. "So you'll see some sites online advertising that type of loan that will say right on there, 'we're not subject to the Military Lending Act because our loan is for more than 90 days.'"

Sailors experiencing financial challenges should notify their chain of command and work with their command financial specialist (CFS) to develop a budget and explore additional options such as military relief societies, eligibility for interest rate reductions and other relief.

DOD AND CONSUMERS FINANCIAL PROTECTION BUREAU PARTNER TO PROTECT SERVICE MEMBER FINANCES

FROM:  U.S. DEPARTMENT OF DEFENSE
Robert L. Gordon III, deputy assistant secretary of defense for military community and family policy, and Holly Petreaus, who heads the office of service members affairs for the Consumer Financial Protection Bureau, prepare to sign a joint statement of principles for protecting service members and their families from financial and consumer fraud and abuse during a ceremony at the Pentagon in Washington, D.C., May 4, 2012. DOD photo by Steven Wood
DOD, Financial Protection Bureau Underscore Partnership
By Lisa Daniel
American Forces Press Service
WASHINGTON, May 4, 2012 - Defense Department and Consumer Financial Protection Bureau officials attended a Pentagon ceremony here today where they signed a joint statement of shared principles that underscores their partnership to protect the finances of service members.

Robert L. Gordon III, deputy assistant secretary of defense for military community and family policy who signed for the department, said the ceremony was another example of the DOD and the bureau coming together to protect service members.
"This is just the beginning," Gordon said, "... as we think of novel and new ways to form a great partnership for our community."

Holly Petraeus, who signed for the bureau and leads its office of service member affairs, said the ceremony was "an outward expression of what we're already doing."
Petraeus, wife of retired Army Gen. David H. Petraeus who now serves as CIA director, said it was important to put on paper DOD's and the bureau's shared interests. As spelled out in the statement, those include:

-- Protecting service members and their families from illegal consumer financial practices and products;

-- Enabling the department and the bureau to provide input to each other to reduce financial risk for service members and their families;
-- Working together to address consumer financial concerns of military members and their families;

-- Reducing risk in the small-dollar lending market; and
-- Supporting financial literacy among service members and their families.
The statement says the department and bureau will work together to monitor market trends directed at service members and their families, coordinate consumer protection measures, identify risky small-dollar loans, and identify ways to improve laws related to financial protection of military members and their families.
"We feel that financial fitness is part of resilience and it's part of readiness for our service members and their families," Gordon said.

Too often, Petraeus said, scam artists prey on service members and their families and many have learned how to get around the language of the law. Service members and their families, she said, should take any concerns about financial and consumer protection to their installation's financial or legal offices.
"That can hold off a lot of trouble," Petraeus said.

CONSUMER FINANCIAL PROTECTION BUREAU TAKES COMPLAINTS ABOUT STUDENT LOANS

The following excerpt is from the Department of Education website:

"Washington, D.C. — The Consumer Financial Protection Bureau (CFPB) is now accepting complaints from borrowers having difficulties with their private student loans. The CFPB will assist all borrowers experiencing problems taking out a private student loan, repaying their private student loan, or managing a student loan that has gone into default and may have been referred to a debt collector.

"The ability to work hard and better yourself through education is part of what makes this country so great," said Richard Cordray, Director of the CFPB. "But getting a higher education can mean taking on significant debt—a big decision with a lot of consequences. The CFPB is now the one-stop federal agency where all private student loan borrowers can ask questions, get information, and file a complaint about this important market."

Student loans have now surpassed credit cards as the largest source of unsecured consumer debt. Millions of students turn to private loans to pay for college when scholarships and federal student loans do not cover the full costs. But unlike federal student loans, private student loans do not generally have the same borrower protections such as military deferments, discharges upon death, or income-based repayment plans.

Until recently, private student lenders have only been regulated by a patchwork of state and federal authorities. Prior to the Dodd-Frank Wall Street Reform and Consumer Protection Act, there was no federal supervisory program over nonbanks that issued student loans. That authority has now been given to the CFPB. Among its reforms, the law created a private student loan ombudsman to assist borrowers and review complaints. The ombudsman, Rohit Chopra, is also responsible for examining the complaints in order to develop recommendations to Congress and other federal government agencies.

Consumers can get help from the CFPB on student loans in a variety of ways including by the Bureau website, telephone, mail, and fax. Consumers can file complaints about any kind of student loan. While the CFPB will alone manage the private student loan complaints, the CFPB will work closely with the Department of Education to route complaints that fall under their purview as the overseer of federal student loans. The agencies executed a memorandum of understanding to ensure close coordination. Examples of federal loans include Direct loans, Stafford loans, Perkins loans, and PLUS loans.

Among the complaints that the Bureau anticipates receiving:

• Difficulties making full payment;
• Confusing advertising or marketing terms;
• Billing disputes;
• Deferment and forbearance issues; and
• Debt collection and credit reporting problems.

Working with the Department of Education, the CFPB released a Know Before You Owe "Financial Aid Shopping Sheet," which is a draft of important financial aid information that colleges could provide to students and their families, including information about monthly debt payment levels after graduation. The CFPB also launched a Student Debt Repayment Assistant, an interactive tool which tens of thousands of Americans have already used to help navigate their repayment options on student loans.

In November, the Bureau published a Notice in the Federal Register to ask students, lenders, servicers, schools, and other members of the public to share their experiences with the private student loan market. The Bureau received thousands of comments from consumers, industry, and the higher education community, which will be analyzed as part of a report to Congress on the private student loan market, to be released later this year.

The CFPB has been taking complaints in categories of consumer financial products and services since launching on July 21, 2011. The Bureau started by taking credit card complaints. In December, the Bureau expanded and began taking complaints on mortgages and other home loans. And, on March 1, the Bureau began taking complaints on checking accounts.

The Bureau expects financial institutions to respond to complaints within 15 days with the steps they have or plan to take, and expects complaints to be closed in 60 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB website. Each complaint will be processed individually and consumers will have the option to dispute the lender's resolution.

The Bureau sent a letter this week to more than 6,000 university officials across the country notifying them of the new complaint system, so they can direct students and alumni to get help with their student loans."