On the eve of Veterans Day, Fed Chairman Ben Bernanke hosted a town hall meeting at Fort Bliss, Texas, that was largely attended by past and present military personnel and their families.
But not all was laudatory on Thursday, and Bernanke (left) noted in prepared remarks that, “The unemployment rate remains painfully high, and more than two-fifths of the unemployed have been out of work for longer than six months, by far the highest ratio since World War II.”
Even though the economy is growing, “for a lot of people, I know, it doesn’t feel like the recession ever ended,” he added.
Bernanke then zeroed in on financial protections specifically in place for service members.
“The people in this room should be aware, in particular, of the special rights and protections provided to military personnel by the Service Members Civil Relief Act,” he said. “The law’s purpose is to allow service members to perform their duties without worry of foreclosure, eviction and civil prosecution–under most circumstances.”
He noted the act allows for the following:
- It caps interest rates for debts incurred before a service member begins active duty;
- Prevents creditors from foreclosing on a home or repossessing a car without a court order;
- Gives service members the option to terminate residential property and motor vehicle leases;
- Stays civil proceedings while service members are on active duty;
- Entitles service members to reinstatement of health insurance that was in effect before their military service began.
Additionally, he said Department of Defense rules regulate the terms of certain kinds of high-cost loans to service members and their families, such as payday loans, tax refund anticipation loans, and motor vehicle title loans.
He then offered three pieces of advice.
“First, while you are in the military, take advantage of training opportunities,” he said. “Many specific skills learned in the military–nursing and healthcare, mechanics, computer programming, police and security work–transfer to civilian jobs. The military also offers training in various life skills. For instance, this morning I visited the Fort Bliss Army Community Service training center, which offers classes on such financial topics as budgeting, debt management, understanding credit, car buying, and protecting against identity theft.”
Second, he said upon leaving the military, they should take advantage of education benefits for veterans. The Post-9/11 GI Bill pays for tuition and fees, a monthly housing allowance, and books and supplies. He noted that, on average, compared with high school graduates, people with college degrees earn about twice as much and suffer about half the rate of unemployment.
“Finally, educate yourself about your own personal finances. Research by the Federal Reserve right here at Fort Bliss shows that financial education can pay off. We found that soldiers who had taken a [Fed sponsored] financial education course were more likely to make smart financial choices, such as comparison shopping for major purchases, saving for retirement, and educating themselves about money management … Making good, well-thought-out financial decisions can make all the difference to your financial future.