More than 200 Tucson-area service members filed formal complaints in recent years claiming mistreatment by mortgage companies, debt collectors, credit rating agencies and other financial firms.
The local complaints to the federal Consumer Financial Protection Bureau were among more than 1,200 filed statewide by military personnel and retirees since March 2015, a new report from the Arizona Public interest Research Group and Frontier Group shows.
Some service members said they were hounded relentlessly for debts they didn’t owe. Others said their credit ratings fell after lenders neglected to remove inaccurate information from their credit files.
Still others said they received no advance notice before debt collection action was taken and bank accounts were seized.
Some received financial compensation or other types of redress after filing complaints. Most cases were “closed with explanation,” which indicates a complaint was substantially resolved or explains why no further action will be taken.
Diane Brown, executive director of the Arizona Public interest Research Group, said the consumer bureau’s ability to help is threatened by a U.S. House of Representatives vote last week to cut its funding and its powers.
The bureau was established as part of the 2010 Dodd-Frank Act, which set out new rules for financial institutions in the wake of the Great Recession. The House voted Thursday to roll back the changes but the Senate has yet to weigh in and could rewrite the House version.
Brown said weakening the consumer bureau would “put those in the military who protect us in financial harm’s way.”
The federal consumer agency isn’t just for military complaints, but it has an office dedicated to service members.
Military personnel receive special financial protections under federal law because their work often requires them to relocate frequently and spend long stretches overseas.
It’s illegal, for example, to foreclose on a deployed service member’s mortgage without a court order.
Unresolved financial problems can negatively affect a service member’s career.
“Delinquent debts and bad credit reports are a leading cause of revoked security clearances,” Brown said.