The Defense Department could be doing more to protect members of the military. The issue is not stronger tanks or better armor, but an entirely different type of security. The Pentagon is seeking to protect members of the armed forces from predatory loans.
While a 2007 law was initially effective at curbing predatory lending to military members, the Defense Department said in a notice of proposed rulemaking, lenders have adapted and evolved their practices to target service members and their dependents.
The recently formed Consumer Financial Protection Bureau has identified several loopholes lenders have used, as well as certain vulnerabilities unique to members of the armed forces.
Marketers often exploit service members’ loyalty by tying their pitches to the military in a strategy called “affinity marketing,” according to CFBP’s Office of Servicemembers Affairs. Additionally, lenders prey on military members because they frequently relocate, causing unforeseen expenses and in turn “a lack of familiarity with the local environment.”
Military families may also be vulnerable because they are required to maintain good finances, as per the Uniformed Code of Military Justice. In some instances, service members can be convicted of dishonorable conduct if they fail to pay creditors.
The 2013 National Defense Authorization Act directed the Pentagon to develop new measures to protect service members from predatory loans, and the department is now seeking comment for the “enhancement of the protections that apply to consumer credit extended to members of the armed forces and their dependents.”
For now, service members will have to look out for themselves: If a potential lender tells you to take the deal because it’s what any good soldier would do, you may want to think twice.
Fee Hike Exemptions
Military retirees enrolled in TRICARE Prime -- the cheaper alternative to TRICARE Standard -- pay an annual enrollment fee to be a part of the program. Every year, this fee increases slightly.
A new rule from the Defense Department freezes the fee at its current rate for survivors and “medically retired members.” The fee will remain frozen “at the rate in effect at the time they are classified” as long as at least one family member is enrolled in Prime.
Previously, federal statute had required enrollment fees be uniform for all military retirees. In 2013, the enrollment fee was $269.38 per person and $538.56 per family.
‘Young Adults’ Officially Covered
Two years ago, the Defense Department announced it was planning to start a program that would allow unmarried children of TRICARE enrollees to stay on their parents’ health care until age 26.
The Pentagon has issue a final rule on the Young Adult Program, cementing the 2011 proposal. It applies to unmarried dependents who do not have their own employer-based insurance options.
Previously, children were eligible for TRICARE until age 21, or 23 if they were full-time students. The 2010 Affordable Care Act required all civilian plans to cover dependents until age 26, but the requirement did not apply to military beneficiaries.
Military families praised the move back in 2011.