Holly Petraeus Urges Top Banks to Follow Law on Military Debts
Holly Petraeus, who will head an office on military issues at the new Consumer Financial Protection Bureau, called on the country’s largest banks to “comply with important legal protections for military personnel.”
In a letter dated Feb. 1, Petraeus, the wife of Army Gen. David Petraeus, urged the banks to “take steps to educate all your employees about the financial protections” in the Servicemembers Civil Relief Act, according to a copy of the letter.
The letter went to 25 banks, including JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. It comes less than two weeks after JPMorgan announced it would refund $2 million to military families who were overcharged on mortgages or wrongly lost their homes.
The 2003 law bans lenders from charging more than 6 percent interest on service members’ debts incurred before joining the military, including mortgage and credit card loans. It also protects a service member’s home from foreclosure during active duty and for “a period of time” afterwards, according to the letter, which was released by Petraeus’ office.
Petraeus also said banks should contact a customer if “you have reason to believe that a borrower is on active duty,” according to the letter.
Elizabeth Warren, the special adviser appointed by President Obama to set up the consumer bureau, appointed Holly Petraeus on Jan. 6 to head the Office of Servicemember Affairs within the new agency, which officially begins work in July.