OFFICIALS LEGISLATION INTEREST GROUPS PUBLIC STATEMENTS COMMITTEES VETOES

Military Personnel Financial Services Protection Act

Date: July 1, 2005
Location: Washington, DC
Issues: Military Personnel


MILITARY PERSONNEL FINANCIAL SERVICES PROTECTION ACT -- (Extensions of Remarks - July 01, 2005)

SPEECH OF HON. JIM DAVIS OF FLORIDA
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, JUNE 28, 2005

* Mr. DAVIS of Florida. Mr. Speaker, earlier this week, the House passed H.R. 458, the Military Personnel Financial Services Protection Act. This important piece of legislation prevents the sale of abusive insurance and investment products, such as contractual plans, to military personnel.

* Contractual plans, which have all but disappeared from civilian markets, offer individuals the opportunity to invest small amounts of money on a regular basis over an extended period of time. Generally, these contractual plans require that investors make monthly installments for a period of 15 to 20 years and charge up front the commission that would be expected over the life of the contract. Because these plans require that commission fees be paid in the first few years of the contract, the investor's account is not fully credited during this period. Furthermore, investors who drop out of these plans before the designated end of the contract sacrifice all the prepaid commission and often find that the number of shares they own is considerably less than what they could have purchased directly.

* A series of articles in the New York Times highlighted the abusive sale of these financial products to members of the Armed Services. While most financial service providers supply their military customers with honest and accurate information, some have engaged in unfair and deceptive practices in an effort to increase their own profits. The men and women who defend our country deserve better.

* I supported H.R. 458 because it ensures that our troops are protected from the potentially abusive sales of certain financial products. By enacting new regulations and prohibiting the sale of mutual funds sold though contractual plans, H.R. 458 provides military personnel with the proper assurances they need to make informed financial decisions.

http://thomas.loc.gov

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