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Posted at 01:12 PM ET, 07/15/2011

Lawmakers seek to protect troops from foreclosure


Rep. Elijah Cummings (Md.), left, the ranking Democrat on the House Committee on Oversight and Government Reform, and Rep. Darrell Issa (R-Calif.), the panel’s chairman. (JOSHUA ROBERTS/BLOOMBERG)

Under U.S. law, it’s illegal to foreclose on the homes of active-duty service members. But at least three banks have been forced to pay multimillion-dollar settlements over the past year after being accused of violating that law.

Now, there’s growing concern among some lawmakers that the violations might be more widespread; the issue has also gained the attention of Holly Petraeus, head of the Office for Service Member Affairs for the Consumer Financial Protection Bureau and wife of Gen. David H. Petraeus, the outgoing top commander of NATO forces in Afghanistan.

Members of the House Committee on Oversight and Government Reform agreed this week to press banks and other financial institutions for information on their practices to ensure they are abiding by the Servicemembers Civil Relief Act (SCRA), which also prohibits lenders from charging active-duty personnel more than 6 percent interest on their mortgages

The committee’s ranking Democrat, Rep. Elijah Cummings (Md.), had been urging the panel’s chairman, Rep. Darrell Issa (R-Calif.), to issue subpoenas to banks, citing evidence that the recent settlements point to a systemic problem. The latest action falls short of that, but the committee could still issue subpoenas if it doesn’t get what it’s after from lenders.

At a forum on SCRA violations this week, Holly Petraeus stressed the importance of the law to service members. She recounted hearing from the wife of a National Guardsman who had to fight with the couple’s bank for months to get the reduced interest rate to which they were entitled.

“It is vital that service members receive all the protections afforded to them by the SCRA,” she said.

The committee intends to send letters to Bank of America, JP Morgan Chase, Citibank, Ally Financial GMAC, PNC, MetLife, SunTrust, PHH Mortgage, U.S. Bank and Wells Fargo, according to a spokesman for Democrats on the committee.

By  |  01:12 PM ET, 07/15/2011

 
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