Holly Petraeus Works to Protect Military Families' Finances
By Elaine Sanchez
American Forces Press Service
WASHINGTON, July 29, 2011 As a longtime financial advocate for military families, Holly Petraeus knew she could bring extensive work experience to the table when she was tapped to lead the new Office of Servicemember Affairs earlier this year.
But for this Army spouse who grew up in a military family, it’s more than just a job.
“It’s very personal,” said Petraeus, wife of Army Gen. David H. Petraeus. “I’ve lived in this military community my whole life; I have a real heart for these people. They’ve all raised their hand to do what they do, often at the risk of their lives.”
With Petraeus at the helm and after months of ground work, the Office of Servicemember Affairs officially opened its doors this week as part of the Consumer Financial Protection Bureau. It’s designed to protect service members and their families from financial predators and pitfalls through education and enforcement of state and federal laws.
Having grown up in the military culture, Petraeus said, she’s familiar with many financial issues, but has made a point to meet with service members and their families across the nation to find out about their challenges firsthand. Mortgages and spouse employment top the list of concerns, she said, which isn’t surprising in light of the struggling economy and housing market.
When service members get orders to move, they’re often under water on their mortgage, she said, meaning they owe more than the house is worth.
“There are no easy answers,” she said. “Some [service members] are choosing to leave their families and go forward by themselves to the next assignment, which is really like another deployment, but for financial reasons.”
Foreclosures are another pressing concern, Petraeus said, noting the Servicemembers Civil Relief Act offers some protections to service members serving on active duty. For example, if a mortgage predates military service, then the service member is protected from being foreclosed against without a court order. Additionally, through the act, service members can ask for their interest rates on debt to be lowered to 6 percent, if the debt was accrued prior to active military service.
However, she said, some lenders aren’t complying with this act. In some cases, service members didn’t get an interest rate reduction or were told they did, but the records didn’t reflect that it had happened. “Families started getting calls from collectors, and in some cases, it evolved into threats of foreclosure,” she said. “And all this was while the service member was deployed and trying to do an important job.”
Additionally, some large banking institutions discovered they had foreclosed on a number of people without a court order, she added.
In turn, frequent moves can be challenging for military spouses who would like to pursue a career, she said. Spouses also often run into roadblocks when trying to renew an occupational license in a new state of residence, or when applying for a new one.
In her travels, Petraeus said, she also hears about general consumer issues, such as difficulties finding a good deal for a car or the burdens of credit card debt.
“For a new recruit getting a paycheck for the first time, there’s a temptation to spend it on cars, electronics, all those things you think you have to have,” she said. “Then you get locked into a contract for years where you’re paying back for that thing.”
The Office of Servicemember Affairs will help to address these issues, and more, Petraeus said. The office, she explained, will ensure military personnel are given a quality financial education, monitor consumer complaints and the response to those complaints, and work with other federal and state agencies to help resolve issues.
Service members represent “a large population that gets a guaranteed paycheck and are very attractive to people who want to get a piece of that paycheck,” she added. “By and large, they’re young, and they may not be very experienced as well in consumer things, and that can hurt them too.”
While financial issues can hit any family hard, they can have a resounding impact on a military family, Petraeus said. A bad credit report can lead to a lost security clearance, she noted. And financial issues can take their toll on a family already dealing with the stressors of deployment.
Military members and their families make great sacrifices and deserve the best financial protections in return, she said, “and I’m in a position to do something about that.”