Mayoral Musings: Unfriendly Fire

By: Albert Kelly, Mayor, City of Bridgeton

If we really want to honor our troops, let’s hold agencies accountable to law, specifically the SCRA.

We spend a considerable amount of time in this country fighting cosmetic battles about whether one group or another is disrespecting our troops or not honoring our armed forces. By cosmetic, I mean the types of battles and arguments that might center on whether or not this person stood or that one knelt at a ballgame in contrast to what I believe is truly dishonoring and outrageous conduct toward our men and women in uniform. I’m talking about the Service Members Civil Relief Act (SCRA) and specifically about how the financial services industry tends to ignore this law while paying lip service to the troops. 

If you haven’t heard of SCRA, it is a federal law that protects those in the various branches of the military from being sued (i.e. foreclosures, judgements, evictions, attachments, garnishments, etc.) while actively serving and up to a full year after active duty. There are also provisions to limit interest and fees for service members. This is as it should be, but it seems like the financial services industry simply doesn’t care.

Recently, the Justice Department obtained a $1.59 million settlement from PRG Real Estate Management and their subsidiaries because they basically lied to the courts in order to get evictions and monetary judgements, including what are known as lease termination fees, from service members who were tenants in Virginia. 

In September of 2017, Bank of America agreed to a $42 million class action settlement involving thousands of service members and their families that centered on excessive interest for mortgage accounts, credit cards, and interest-bearing loans dating back to September 11, 2001 and then trying to conceal it from all involved. 

Bank of America denies everything and according to them we shouldn’t read too much into the fact that they settled. They contend it was cheaper to do so than paying lawyers or rolling the dice on the possibility that an outraged jury would award damages far beyond the $42 million that made the whole mess go away.

In 2015, the Justice Department reached a roughly $123 million settlement with JP Morgan Chase, Wells Fargo Bank, Citibank, GMAC Mortgage, and BAC Home Loans, which was taken over by Bank of America. This settlement was related to what the Justice Department deemed “unlawful non-judicial foreclosures” on the homes of men and women actively serving in the military in violation of SCRA. The settlement was likely a fraction of what the banks made.

Keep in mind that these were essentially the same banks that got filthy rich peddling subprime mortgages and packaging the toxic mess as “credit default swaps” and “collateralized debt obligations” until the housing bubble burst. American taxpayers had to come to the rescue while they were fighting over bonuses and compensation. Given that history, why expect anything different when it comes to dealing with our men and women in uniform.    

Here’s another example of what’s been happening to the troops: In January, the Consumer Financial Protection Bureau released its annual report covering these same issues and the impacts on members of the military and their families.

In 2018, more than 18,000 complaints were reported by service members covering everything from credit cards and mortgages to student loans, car loans, payday loans, and everything in between. I suspect that for the banks it’s a lucrative revenue source and settlements are simply part of doing business. It’s factored into the equation—if caught, simply settle and admit no wrongdoing. 

Think about the soldier who gets an anguished call from his or her spouse about the foreclosure notice in that day’s mail. Or the soldier fresh off looking for IEDs who has to dial 2 and wait on hold for a customer service rep to talk about their student loan, then is told he missed some deadline for a “forbearance” and now the full amount is due with penalties. Talk about friendly fire.  

Not all service members are blameless in their financial choices, but there’s a proper time to deal with those issues and it’s a separate thing from certain financial institutions and their disregard for SCRA and taking advantage of the disruptions associated with active duty to squeeze out more revenue.  

So whether standing or kneeling, if we want to honor the troops in a way that might actually help them, it should include raising hell about how some banks treat the people, including their families, defending our country.