Meet Holly Petraeus: U.S. Servicemembers' Advocate at the CFPB
Sometimes, catastrophes can lead to changes that better protect us -- and by "us," I mean the residents of Main Street -- average Americans whose voices often get lost among the lobbyists and corporate interests.For example, in response to the Great Depression, Congress in the 1930s created the Federal Deposit Insurance Corporation to regulate financial institutions and insure most of our bank deposits. Similarly, after the devastation of World War II, global powers established the United Nations to facilitate cooperation among, and maintain peace between, countries.
This week, America is witnessing the genesis of another agency born out of disaster and designed to protect us: the Consumer Financial Protection Bureau. Crafted by the Obama administration as part of the president's larger plan to reform Wall Street after the 2008 financial meltdown, the agency's purpose is to help consumers avoid being taken advantage of.
Specifically, the CFPB strives to create a marketplace for financial products -- including student loans, credit cards, mortgages, and prepaid cards -- "where customers can see prices and risks up front and where they can easily make product comparisons, in which no one can build a business model around unfair, deceptive or abusive practices, that works for American consumers, responsible providers, and the economy as a whole."
The CFPB, which describes itself as "a cop on the beat to enforce laws," officially opens its doors for business on Thursday. My colleague, Catherine New, recently published a CFPB "User's Guide" that details the agency's plans for better educating and protecting Americans.
Guiding Military Members Through Their 'Extra Challenges'
In Petraeus' open letter on the CFPB's website, she writes: "we understand that military life can have some extra challenges, such as deployment and frequent moves, and that those challenges can sometimes have powerful financial repercussions. We also know that there are businesses and scammers that target servicemembers with bad deals and outright rip-offs," such as lenders who charge unusually high interest rates, or require advance payments in order to qualify for loans.
Guiding Military Members Through Their 'Extra Challenges'
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However, beyond its commitment to serving Americans in general, the CFPB has also dedicated resources exclusively to addressing the unique financial issues facing members of the U.S. armed forces and their families through the establishment of the Office of Servicemember Affairs. Holly Petraeus, who is not only the wife of Gen. David Petraeus, but also the daughter of, and mother to, servicemembers, oversees it.In Petraeus' open letter on the CFPB's website, she writes: "we understand that military life can have some extra challenges, such as deployment and frequent moves, and that those challenges can sometimes have powerful financial repercussions. We also know that there are businesses and scammers that target servicemembers with bad deals and outright rip-offs," such as lenders who charge unusually high interest rates, or require advance payments in order to qualify for loans.
According to Petraeus, "scammers are very good at making things sound plausible," which is why she feels strongly that consumer education is a key component of OSA's work. She wants servicemembers to think about their financial decisions "ahead of time and decide if this really is the wisest decision I can be making right now?"
To that end, the OSA is focused on leveraging the financial education classes already offered through various military organizations. "We want to look at, are they teaching at the right teachable moments?" she asks. "And in a way that is engaging and that people really retain and put to use."
As Petraeus explains, soldiers, sailors and airmen face different issues depending on where they are in their lives and careers. "Certainly for a young servicemember, one of the first things they want to do is go out and buy that car, or buy that computer or that iPhone or that TV," she says. Here Petraeus is speaking from experience. As National Public Radio reported, Petraeus has confided to a room full of servicemembers that when she and her husband were younger, they "did some of the things that you know I don't recommend people do now – which is, buy the hot sports car, you know, sign the contract for the apartment sight unseen because they sent us a good-looking brochure."
Other practices Petraeus cautions against include calculating an item's price based only on the monthly payment instead of the total cost over time. She also strongly recommends that servicemembers who are in financial trouble consider all their options before taking an expensive loan. "If it's a true emergency that they need the money for, there are some military aid societies right there for them," she says, rattling off a list of resources the way some people explain a family tree.
"The Army Emergency Relief, the Navy-Marine Corps Relief Society, the Air Force has the Air Force Aid Society. And then there's the Coast Guard Mutual Assistance. So they're there to help with those emergency situations and they can give interest-free loans, sometimes even grants. So that would definitely be the best place to look. You know, you can't beat interest-free. And then there are other credit unions and banks that serve military installations, that would certainly be a place to look for a loan." She pauses, then adds, "I think probably one of the worst things you can do is go trolling on the Internet for a military loan. So many of those are not only expensive, but some are outright scams."
Petraeus talked more about her new role at the CFPB, and her financial advice for servicemembers and their families, in our video interview, conducted a few days before the bureau officially opened for business.
Loren Berlin is a columnist at DailyFinance.com. She can be reached at loren.berlin@teamaol.com. You can follow her on Twitter @LorenBerlin, and become a fan on Facebook.
As Petraeus explains, soldiers, sailors and airmen face different issues depending on where they are in their lives and careers. "Certainly for a young servicemember, one of the first things they want to do is go out and buy that car, or buy that computer or that iPhone or that TV," she says. Here Petraeus is speaking from experience. As National Public Radio reported, Petraeus has confided to a room full of servicemembers that when she and her husband were younger, they "did some of the things that you know I don't recommend people do now – which is, buy the hot sports car, you know, sign the contract for the apartment sight unseen because they sent us a good-looking brochure."
Other practices Petraeus cautions against include calculating an item's price based only on the monthly payment instead of the total cost over time. She also strongly recommends that servicemembers who are in financial trouble consider all their options before taking an expensive loan. "If it's a true emergency that they need the money for, there are some military aid societies right there for them," she says, rattling off a list of resources the way some people explain a family tree.
"The Army Emergency Relief, the Navy-Marine Corps Relief Society, the Air Force has the Air Force Aid Society. And then there's the Coast Guard Mutual Assistance. So they're there to help with those emergency situations and they can give interest-free loans, sometimes even grants. So that would definitely be the best place to look. You know, you can't beat interest-free. And then there are other credit unions and banks that serve military installations, that would certainly be a place to look for a loan." She pauses, then adds, "I think probably one of the worst things you can do is go trolling on the Internet for a military loan. So many of those are not only expensive, but some are outright scams."
Petraeus talked more about her new role at the CFPB, and her financial advice for servicemembers and their families, in our video interview, conducted a few days before the bureau officially opened for business.
Loren Berlin is a columnist at DailyFinance.com. She can be reached at loren.berlin@teamaol.com. You can follow her on Twitter @LorenBerlin, and become a fan on Facebook.
