FRA NewsBytes - 08-15-2014

In this issue:
Congressional Caucus for Military and Veteran Caregivers
CFPB gets Debt Relief for Service Members in Predatory Lending Scheme
U.S. Family Health Plan is Duplicative and Should be Eliminated


Congressional Caucus for Military and Veteran Caregivers
Minority Leader Nancy Pelosi (Calif.), Senator John McCain (AZ), Senator Jack Reed (RI) and Congressman Jeff Miller (Fla.), Chairman of the House Veterans Affairs Committee (HVAC), started a new bipartisan congressional caucus to lead efforts in Congress to address the challenges facing the 5.5 million military and veteran volunteer caregivers to America’s wounded warriors.

These family members and loved ones shoulder the responsibility of bathing, feeding, dressing, managing medication and injections, and arranging for rehabilitation, all while many are raising a family. A recent RAND study commissioned by the Elizabeth Dole Foundation estimates the services they provide save our nation $13.6 billion annually, yet these caregivers too often pay a price, suffering physical and emotional stress and illnesses; difficulty maintaining employment; financial, legal and family strains; and isolation. The “Hidden Heroes Congressional Caucus” for Military and Veteran Caregivers, co-chaired by Leader Pelosi, Senator McCain, Senator Reed and Congressman Miller, will raise awareness and develop legislation in support of the millions of military and veteran caregivers tending to their ill and injured warriors at home.


CFPB gets Debt Relief for Service Members in Predatory Lending Scheme
The Consumer Financial Protection Bureau (CFPB) and 13 state attorney generals recently obtained approximately $92 million in debt relief from Colfax Capital Corporation and Culver Capital, LLC, also collectively known as “Rome Finance,” for about 17,000 U.S. service members and other consumers harmed by the company’s predatory lending scheme. Rome Finance lured consumers with the promise of no money down and instant financing. Rome Finance then masked expensive finance charges by artificially inflating the disclosed price of the consumer goods being sold. Rome Finance also withheld information on billing statements and illegally collected on loans that were void. Rome Finance and two of its owners are permanently banned from consumer lending.
These companies offered credit to consumers purchasing computers, videogame consoles, televisions, and other products. The products were typically sold at mall kiosks near military bases with the promise of instant financing with no money down. In some cases, Rome Finance was the initial creditor, and in other cases, Rome Finance provided indirect financing by agreeing to buy the financing contracts from merchants who sold the goods.

Service members and other consumers would fill out a credit application at the kiosk and, if approved, sign financing agreements that did not accurately disclose the amounts they would have to pay for that financing. These contracts generated millions for Rome Finance while burdening consumers with excessive debt. Rome Finance has been the subject of previous state and federal enforcement actions. The CFPB and state attorneys general uncovered substantial evidence that Rome Finance’s lending scheme violated several laws. The CFPB in its consent order found that Rome Finance:

  • Provided inaccurate credit information that prevented consumers from making an informed decision about their credit;
  • Failed to include certain disclosures in billing statements required by law; and
  • Was not licensed to provide consumer lending in any state and charged annual percentage rates higher than some states allowed.

To address these violations, the CFPB’s consent order requires Rome Finance to:

  • Provide approximately $92 million in debt relief;
  • Update credit reporting agencies and notify service members and other consumers of debt status;
  • Pay redress to compensate affected consumers for the amount of excess finance charges they paid;
  • Cooperate with service members and other consumers who seek to vacate judgments against consumers relating to the financing agreements; and 
  • Rome Finance and two of their owners, Ronald Wilson and William Collins, are permanently banned from conducting any business in the field of consumer lending.

The full text of the CFPB’s Consent Order will be available at: http://files.consumerfinance.gov/f/201407_cfpb_consent-order_rome-finance.pdf


U.S. Family Health Plan is Duplicative and Should be Eliminated
According to a Government Accountability Office (GAO) report that was released on 31 July 2014, the U.S. Family Health Plan (USFHP) is duplicative and should be eliminated. This health care program serves approximately 134,000 military family members and retirees but there is significant overlap with TRICARE managed care support contractors (MCSCs). The USFHP within the Department of Defense’s (DoD) current military health system (MHS) is duplicative because it offers military beneficiaries the same TRICARE Prime benefit that is offered by the regional MCSCs. For four of the six USFHP designated providers, 80 percent of their service includes areas where MCSCs offer TRICARE prime.

According to the report, The U.S. Family Health Plan costs the Defense Department more than $1 billion a year, and its unique nature restricts DoD from maximizing use of military hospitals and clinics. GAO official Debra Draper stated that USFHP’s geographic overlap with existing TRICARE Prime regions make it a target for elimination.

The full text of the GAO report is available at: http://www.gao.gov/assets/670/665151.pdf