Senator Clinton Announces Key Committee Approval of Enzi-Clinton Military Anti-Fraud Bill
Senator Clinton Announces Key Committee Approval of Enzi-Clinton Military Anti-Fraud Bill
Washington, DC - Senator Hillary Rodham Clinton (D-NY) announced that the Senate Banking Committee today unanimously approved legislation she introduced with Senator Mike Enzi (R-WY) that would protect military personnel against individuals using deceitful practices to sell financial products. The Military Personnel Financial Services Protection Act is now slated for consideration by the full Senate. A similar bill, H.R. 458, passed the House last year by a vote of 405-2. This is part of Senator Clinton's continuing effort to provide better financial protections for our men and women in uniform. Senator Clinton has also introduced legislation approved by the Senate to help arm members of the armed forces and their families with the financial knowledge needed to make informed decisions about their future.
"Today's vote is a positive step toward protecting service members from unscrupulous insurance agents," said Senator Clinton. "Our men and women in uniform are serving bravely both abroad and at home, and we owe it to them to make sure they are not preyed upon as they try to take care of their families."
"Protecting our military personnel is not a partisan issue and this bill and this vote are proof of that. Our men and women in the military are trained in the use of high tech weaponry and defense systems. This training doesn't protect them from shady salespersons out to make an easy profit. This bill does," said Enzi, member of the Senate Banking Committee.
Some financial services companies have been disguising, marketing and selling high cost periodic payment plan certificates solely to military personnel on military bases. These plans, nonexistent in the civilian market, are similar to mutual funds except that extremely high sales commissions rob investors of years of earnings and penalize them when they stop investing in the fund. Some insurance products provide very low death benefits while charging very high premiums are marketed to soldiers. Salespersons have disguised the product to appear endorsed by the Department of Defense or the federal government. Many investors who fell prey to these types of sales became aware that they were scams too late.
The bill would provide for state insurance regulator jurisdiction over the sale of insurance products on military bases. It would also require the Department of Defense to keep a list of individuals barred or banned from military bases because of abusive sales tactics. Military families would also be protected under the bill because it would prevent investment companies from issuing periodic payment plan certificates, an outdated form of mutual fund with high up front costs and penalties.
Senator Clinton has also authored legislation with Senator Susan Collins (R-ME), approved by the Senate in December 2005 as part of the Department of Defense Authorization bill to require the Department of Defense to provide consumer education for members of the armed forces and their spouses. It instructs the Secretary of Defense to carry out a comprehensive education program for military members regarding public and private financial services available to them and the life insurance and marketing practices to be on guard against. This education will be institutionalized in the initial and recurring training for members of the military.
The Clinton-Collins bill also requires that counseling services on financial and insurance issues be made available, upon request, to spouses as well as members of the armed services. This will allow important financial decisions to be made as a family and also allow spouses access to assistance if they are forced to make decisions while their husband or wife is deployed. The Clinton-Collins measure requires a permanent, trained counselor at military bases with at least 2000 assigned personnel, and a part-time, equally capable counselor available at smaller bases. To help protect against predatory insurance practices targeting junior service members, the Clinton-Collins measure requires counselors to advise servicemembers of the availability of Servicemembers' Group Life Insurance (SGLI) as well as other reputable products.
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