Statement of Senator Mike Enzi
Senate Banking Committee Markup of:
S. 418, the Military Personnel Financial Services Protection Act
June 14, 2006
Thank you Mr. Chairman.
Today, I am pleased that the Committee will vote on S. 418, the Military Personnel Financial Services Protection Act. I think the provisions of this bipartisan bill are crucial for the protection of our Armed Forces and their families. While most of America’s focus on the military concerns our actions abroad, protecting personnel and their families at home can sometimes be overlooked. But for years now, men and women in the armed services have fallen victim to unscrupulous salespersons pushing high cost and unnecessary financial products and life insurance. This practice must be stopped.
As numerous investigations, studies, and congressional hearings have shown, bad actors within the insurance and financial products industry have been taking advantage of military personnel in order to turn a quick profit. The military personnel they target are often young, inexperienced in financial matters, and particularly vulnerable to the aggressive sales tactics used by some companies. To make matters worse, Department of Defense Directives and state regulations would be violated or completely ignored by these salesperson, without repercussion.
In some cases, service men and women were sold life insurance policies with low benefits and premiums as high as fourteen times the amount available to every enlisted person under the Servicemembers’ Group Life Insurance program.
In other cases, they were sold investments that have all but disappeared from the civilian markets because they can rob
investors of years of earnings. But some salespersons found a niche outside of the public mainstream to sell these disreputable investments, on our military bases.
It should be noted that there are many upstanding financial and insurance companies that sell very worthwhile investment and insurance products to military families. They should be applauded for the fine job that they do in helping our military members and their families. This bill is targeted at the few who abuse the system and prey upon our military.
And I believe that my bill, the Military Personnel Financial Services Protection Act, will stop these practices by targeting the bad actors and adding much-needed transparency and communication between agencies.
My bill clarifies confusing jurisdictional issues between DoD and state regulators, allowing regulators to better enforce state and federal law on military bases. It would create a registry to track investment advisors, brokers, dealers, and insurance salespersons, and let bases know when a suspicious salesperson has walked through their gates. Finally, the bill would ban the worst types of financial products being sold to our military. These products have disappeared from the civilian market, and they should disappear from our military installations too.
This bill has gained bipartisan support in Congress. The House bill, introduced by Congressman Geoff Davis, passed last year by a vote of 405-2. In the Senate, the bill is cosponsored by three other members of this committee, Senator Hagel, Senator Bunning, and Senator Schumer. I would like to thank them for their support in this effort. I also thank Senator Clinton, with whom I introduced this legislation in the Senate. Finally, I thank Chairman Shelby and Ranking Member Sarbanes for their cooperation in finding the consensus solution and bringing this bill before us today.
Members of this committee, I urge you to support this legislation and protect the financial future of our military personnel and their families. During a time when so many of our armed forces are bravely fighting tyranny abroad, we must ensure that they are protected at home.
Thank you, Mr. Chairman.