How Some Lenders Prey on Deployed Service Members

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The law protects deployed service members from repossession and foreclosure. Unfortunately, no one has told lenders.  Thanks to mandatory arbitration—a clause in a contract’s small print that waives one’s right to court intervention—lenders are circumventing the rules, placing the homes and cars of US troops in jeopardy, the New York Times reports.

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Banks argue it’s a more cost-efficient way to take care of problems and stave off frivolous lawsuits, military members say it violates the Servicemembers Civil Relief Act, designed to protect troops from the repo man and foreclosure when they’re overseas. Arbitration often favors the lenders.

A bipartisan bill was on the table last year to help military members escape the arbitration black hole, but it was met by resistance from the US Chamber of Commerce and SIFMA, a group made up of lenders who often tout their support of the military, the Times notes. “While we remain very supportive of the troops, we see no empirical or other evidence that service members are being harmed by or require relief from arbitration clauses,” a SIFMA counsel member said in a statement.

Charles Beard, a service member whose car repossession was documented in the Times article, probably disagrees: While he was in Iraq, repo men went to his California home and took his car keys from his wife—without a court order.

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Bill Formby
9 years ago

Our troops can be certain of one thing; the big ballyhoo about everyone’s support for them is not worth the cost of the paper it takes to make up a sign board. Up front the congress, the banks, the rich cats are all about how much they appreciate the troops and their families much like the Wizard of OZ. If you peek behind the curtain however, you will find that they really do not give a rat’s ass about the individuals or their families. They are support the concept of what our military does for them, i.e., protects the American way of life. By no means should any individual in the military think that they mean him or her when they issue their gushing praise and support. Just because you have been eating sand, being shot at, and dodging IED’s does not mean that a banker should lose a dime in interest on your home mortgage. Nor should they think that their elected leader should consider their plight when they are threatening other countries with our military might. The latest screw up by 47 senators in their attempt to blow up the negotiations with Iran which may well lead ultimately to a war with Iran shows that no one is thinking about any individual serving in the military. The point of having a strong military is in not having to use it, something that the Republicans have never learned. Their view is what is the point of having a strong military if you do not use it.

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