Congress may wait until next year to protect service members from what some say is financial exploitation.[@@]
Sen. Michael Enzi, R-Wyo., chairman of the Senate Securities and Investment Subcommittee, introduced a bill in the Senate Wednesday that would clarify the regulation of insurance products on military bases and protect enlistees from inappropriate sales practices and products.
“There are many upstanding financial and insurance companies that sell very worthwhile investment and insurance products to military families, and this bill is not geared toward these companies,” Enzi says. “It’s designed for those few out there who are selling financial snake oil to military personnel. These brave men and women who serve in our armed forces protect our freedom. With this legislation we can give them some protection from disingenuous sales tactics.”
The House passed a similar version of the bill earlier this week.
Even though the House version of the bill passed with a 396-2 vote, the chances of the bill becoming law this year are viewed as slim at best, given the bill’s late arrival on the congressional calendar and the rush by lawmakers to adjourn for the final weeks of the fall election campaigns.
Although time is short this year, “our efforts now will give us a foot hold for next year,” Enzi says.
The bill, the Military Personnel Financial Services Protection Act, would clarify the authority of state insurance regulators over sales of insurance products on military bases in their states. The bill also would require state regulators and the U.S. Department of Defense to maintain lists of agents banned from various military installations and to share those lists with base commanders to help prevent bad agents from simply moving from base to base.
Additionally, the bill would prohibit the sale on contract mutual funds, which are similar to mutual funds but have up-front fees of as much as 50% during the first year that the fund contracts are in effect.
“It is critical that servicemen and women who sacrifice for their country not be exploited or taken advantage of through dishonest business practices,” says Sen. Chuck Hagel, R-Neb., a bill co-sponsor. “We must ensure that America’s military personnel are offered first-rate financial products so they can provide for their families and invest in their futures.”
Sens. Hillary Clinton and Charles Schumer, 2 Democrats from New York, are also co-sponsors.