will -- can want be viewed by the government to expand its authority in any local traditional state domain including the home school issue, but not limited to it, i think, in my opinion, that should address those concerns taking off the table the possibility that i think they are worried about which is next year after the convention would be put into force. there's some intrusion that would not normally have been allowed, but now would be allowed under the convention, even though not required, and so i think the general reservations i'm suggesting should address the concern as i understand it, and you wouldn't need an additional one for home schooling, although an understanding that is already proposed that says this does not affect home schooling, which i certainly would be quite welcome. >> thank you.

ms. west, you talked about how foreign countries have not perceived how we ratified the convention, and i wonder if what you heard from business leaders around the world is further concerns about u.s. leadership on the issue of disabilities and the extent to which you think that might continue to be a road if we are not able to pass the treaty in this session of congress or of the senate. >> well, we see the convention as the means for us to really have a very first time way of understanding market requirements whether it's developed country or a developing country, and that by

not finding the crpd, we will be in cases, excluded from some of these discussions which could lead to solutions, and for business community, it's all about being able to understand the customers' requirement whether it's by country or industry, so we think it is a very important that we be at the table and be able to glean from these discussions about different industry whether it's transportation or banking or retail industry specifics, and that will allow the united states companies, especially companies that have global interests to be able to continue that leadership in the world market. also, we think, currently, at least in the technology area, we enjoy tremendous leadership in the harmonizing international

standards, and these standards are very, very important because a really allow the continued leadership of the u.s. company in the global setting. >> thank you. i got noticed they called another vote on -- in the senate, so i think we should take a short recess. hopefully senator menendez and senator corker will be back because they'll be able to volt now because i'm going to have to vote. let's recess for 15 minutes, and hopefully by then, they'll return. thank you. very fast, thank you. >> thank you, senator shaheen, and i'm sure you got more time than you normally can get. [laughter] i'm sure you made good use of it too. [laughter] thanks for you chairing in the

interim, and thank you to the panel. i thought the testimony was all interesting. i want to explore a couple things. you know, i listen to your testimony, and i understand your opposition, which i respect, but i think that you deminimize, in your testimony, the notion can do. in your testimony, you seem to disparage the idea of asking other countries to make facilities accessible to disabled people in order to make more -- life comfortable for american tourists who are few in number of and brief in the visits is the exact quote from your testimony. don't you think, as america for a moment, that it is important for our country and for our

government to try to create the opportunity for americans to be able to visit a dying relative abroad, to be able to do a sales pitch in another country or have a member of the armed forces abroad with a family member with disabilities be able to have these americans fulfill their god-given potential without the challenges of impediments that individuals will disabilities find globally and increasingly less than in the united states, but occasionally still in the united states, even with the ada law. >> look, i'm sympathetic -- >> i'm not asking about the sympathy. >> i understand. >> i'm asking whether or not you believe -- should it not be the power and the advocacy of the united states on behalf of the citizens to be able to enjoy

what they enjoy in access to opportunity here to become a more global norm? >> i think we can want make everything that we would like into a global norm, and i'm skeptical that this is the right priority for us, and if i could, senator, i'd just give you another example. a lot of americans have difficulties with foreign los languages, and so -- i'll include myself there -- we find it easier if everyone spoke english or didn't speak english, the country would provide translaters. >> that's not a disability though. >> that's a limitation. it's not as severe. we can want get every country to do exactly what we would like them to do. >> we cannot get every country to be a democracy. >> that is right. that is right. >> we do not stop from seeking to promote democracy globally. >> we do not have a treaty -- >> we do not ultimately wish

that certain countries would move in a way that creates a security challenge dot united states, but we sent our sons and daughters abroad when we think the national security of the united states is at stake, so if i were to take your argument to a logical conclusion, then i would, in essence, advocate the u.s. role in so many dimensions in a way in which we would not pursue the national interests, so i -- that's your point of view, and i respect it. let me turn to professor bradley. i want to thank you for -- i read your testimony as a whole in addition to listening to your synthesized version, and i think it's considered testimony. i look forward to hopefully engaging you, as i'm sure senator corker might on the ruds package.

you raised concerns the advisory committee the treaty creates could invalidate the ruds even though the u.s. treaty does not allow them to do that. in the last congress, we adopted a broad set of ruds to adapt the federalism and advisory committee power concerns, and i think last year, my description of it is we used the belt and suspender approach to address concerns, but now we're in the territory of three belts and three pairs of suspenders and a team of engineers to supervise the operation, but i think if that's what's necessary,. i want to entertain it. my point here is i get the expression of your concerns, and i want to assume we could adopt a set of ruds to satisfy your concerns that may be the concerns of others as well, and i'm optimistic that we can. do you think that we need to

wait until the bond case is decided to consider this treaty as some have suggested we do? >> thank you, senator. so in terms of what the -- has been proposed before, my view is they are not belt and suspenders. i already indicated, for example, that the ones proposed simply say that congress is not required to invade state and local authority, does not take it off the table, and that's helpful. on the committee, it's not fanciful to validate reservations. the human rights committee already said they have the authority. that's not in the treaty either. it was not addressed in the proposed rudd last year on the committee. you can't validate such a way to force something domestically. >> internationally at least. >> yeah. >> and so then the question would be, what the united states would do if found to be not to have those ruds available internationally.

>> he's willing to aadditional belts along the line of what you asked about. if that were done, my view is that that would be sufficient as long as the los language was tit in the way i talked about in the written testimony. >> i want to get to the core of the question, which i hear what your concerns, you reiterated them, and i get it. my question is, if assuming that we did, that we worked with you and got to language that through you would satisfy some of our colleagues on these critical issues, do you really think that we need to wait for a decision on bond in order to accomplish the goal? >> i do not. it is possible that the bond case would cut back on some of the treaty power concerns that have been raised. they are not going to add additional concerns. as long as the ruds we're talking about address those

concerns fully, then i don't think -- whatever happens in bond would not change the picture. >> that's very helpful. let me just say, make one comment on one of your observations with reference to the human rights committee, which attempted to expand scope of the authority. the united states successfully pushed back, and we've made it clear before the committee that it does not have the authority on the international law to invalidate ruds, and either those with the disabilities committee, so, look, any entity, any entity including the united states congress -- now, i know there's concerns about piending future congresses, and although the ruds value kateed the knowledge of our history in the congress, a future congress as mr. gray said can go ahead and amend the american disabilities act. it has once. we constantly see a great desire to change the president's health care law. that's under, you know, that's -- that's just one of a

hundred examples i could give. now, there's a lot of things they can do. they could seek to ultimately sell the capitol for scrap to disband -- expressions of approval or disapproval are not in order of the committee. i'm trying to get to the point here which is that i have great faith despite our challenges sometimes in the institution and the american people who would say, wait a minute, that's way off base. so i just think that in suggesting that, you know, we look at whatever language is necessary, but i don't think this congress wants to be bound in itself in its actions by what the previous congress sited by evidence of those who want to undermind the president's health care law. a present congress wants to

change what the previous congress did. that's the nature of the essence here. now, i don't think -- i think with only a congress might be able to change a future rudd or change the americans with disabilities act that goes through the same robust debate that takes place in the congress. it has to get the appropriate majority votes in the congress, and then it has to be signed by a president so i think -- >> i agree if congress decides to amend the ada, obviously, it can consider doing that. we have to recall that congress used the regular commerce clause and other powers to enact the ada, and i suggest it should return to the powers if it wanted to amend the ada. all i suggest to take off the table is the claim that some congress might try to expand its authority beyond even the broad commerce laws in ways that address very, very local traditionally state law issues.

that's the only issue i'm talking about taking off the table, not the ability of congress to legislate. >> i agree with you. >> that would be of concern beyond the question of this treaty. >> it's a concern for treaties because of the case that says if you have a treaty, congress ramps up authority beyond even the commerce clause so outside of treaties, you don't have that concern? >> the courts would hold congress to the commerce clause outside the treaty context, and the other thing in the bond case, although, we don't have to wait for it, many justices said, you know, solicitor regime said congress would not invade the prerogative of the states, and immediately, justice kennedy says, why do i see this prosecution here? don't say that we should just depend on congress not doing things that we are afraid of. take them off the table. >> yeah, expect that let's be clear. in that case, the basis under which federal action took place, in this case, the justice department pursued, was under an

enacts statute and stated here time and time again by relevant parties that what is the americans with disabilities act is our enacting statute. it's been constitutionally upheld and to the extent that the government would have to prosecute, would have to prosecute under the ada, so whatever is prosecuted is already prosecuted on those who may have violated the ada. >> as you pointed out, senator, it could be amended. >> of course. anything we do here can be amended. >> i think it's just a little absurd, and i don't want to prolong it, but it's absurd to think that somehow we're not going to ever allow a future congress to change anything that a previous congress would do because, as americans change, majorities, for example, they do that for a ran. they want to see another course of action, so i'm not sure that that can can be full proof, but i get the concern. >> thank you, mr. chairman, and i just, for those looking on, i know that someone raised the issue of the bond case heard before we act.

i want you to know i'm not the person who did that. i want to make sure that people understand i'm not that person, and secondly, i know that you always have a more considered view. >> okay, thank you. >> second thing i'd like to mention is i know a number of members, obviously, have not been here today, but are reading the testimony, and i know that some of them would like to have until monday afternoon to assess questions, if that's okay for the record. i know it's not the norm. >> without objection, so ordered. >> and i think the point, and, again, i know you, yourself, are a legal scholar, and i know these gentlemen are. i think the point that he's trying to make on this issue is not that a future congress cannot change laws. we all understand that, but it's that the treaties' ability to affect the commerce clause changes dramatically the norms congress acts under. it's the point missed, and as you all talked past each other i think a bit in the last

conversation, and i hope it's something that we're able to secretary kerry -- we're able to resolve. i have a bland set of questions, and i apologize because, again, we're trying to work through the legalities here, and i know they spoke to these things, and i want to walk through these in order to build the record so that if something happens down the road, we have that hearing committee. can you describe how the crpd might alter the constitutional balance of power between federal and state governments, particularly in the areas that have long been reserved to the states? >> >> yes, thank you, senator. as i indicated in the written testimony, a previous treaty in u.s. law addresses some matters that are less to state and local regulation or private decision making. it's not the fault of the convention. the convention is written to try to accommodate more than a hundred legal systems or the entire world and does not focus on u.s. law so it addresses issues of care of the children

and family law that primarily in the united states are under the domain of state and local law. it also does not distinguish between housing, private housing decisions, and public accommodations, and u.s. law makes those distinctions in part because of limits on the federal government's authority to regulate private decisions and things that are quite local, and maybe the bond case will or will not change the picture, but right now, if there's a convention, and thank you, senator, for clarifying the exchange before. you are absolutely right about that. the issue is not whether congress would change the laws. they can always use regular powers to do that, and that's just a different congress. we have case law, though, that says, if there's a treaty, congress does not need to worry about normal limitations on legislative authority. there's nothing too local, allegedly under this old case. once there's a treaty in place, regulate local housing decisions or private action in ways congress could never do, and without protection here, there's

at least a danger -- talk about how probable it is, that the convention is used in that sort of way, and i do think it's a danger that could be fully addressed by the appropriate reservations, but it's important that we do that. >> are the administration's proposed ruds on federalism sufficient to address these concerns? if not, how would you modify the ruds? >> thank you, and as i testified, i think the proposed understandingings, declarations are not sufficient, and i will not go through them at the moment -- >> are you referring to the previous ruds that were because as far as i know there's no new ones -- talking about the previous; right? >> that's correct. >> i'm referring -- >> they were adopted -- >> the ones proposed last year, and they are not sufficient, for one thing, the federalism and private decision making ruds simply say that if you read them carefully, that the convention is not requiring that we invade state and local law, not

requiring we take over some private stitions, does not in any way stop congress from using this missouri against holland idea to expand congress' authority. at any time they want to do so in the future, and i sense that a lot of people are okay with making it clear that's not going to happen, and i think that needs to be fixed. other things like understanding on the committee does not, for example, refer to the problem that they might try to strike down reservations with some committees doing that before, and, by the way, senator menendez pointed out, pushed back on that, however, the u.n.'s national law commission within the last year or so, a key law making arm of the u.n., came out and said, against u.s. position that they find reservations are no good, that we assumed they are still bound with the benefits of those. we may push back as well, but argues for clarifying this, i think. >> the fact that the supreme court recently heard a case dwus

discussing whether treaties expand the power of the federal government legitimize these concerns even if the case is decided on other grounds? >> i think certainly the bond case highlights some of the concerns that get raised when you have a treaty. they are correct that we don't yet have that because we have earlier legislation, but the issue of the people are afraid about is what if we have new legislation, and the senator pointed out that we obviously don't know whether that will happen in the bond case. a lot of people were surprised that the treaty power that was supposed to deal with syria or things that we often recognize is used for really local crimes within a state, and the justices on the stream court, i think, were surprised. i'm not shocked the senate was surprised they agreed to in the chemical chemical weapons convention, because that treaty is not specific about what it's requiring, and you find down the line that congress, the executive branch applies them in ways never intended, and that's another argument for rudd is to

prevent that from happening dun the line just like maybe we should have done that in the bond case. >> and, again, i know many of these questions have been answered in other ways, and i just want to have these for the record today, but is it possible that the ruds adopted by the senate could be overridsen in the future, for instance, reservation against federal power, and if so, how do you assure the ruds we adopt are protected? >> >> thank you, senator. we don't, unfortunately, have examples of where congress or the executive, as far as i'm aware go back on ruds. i hope that would be unlikely since it's a condition of the senate's advice to consent. i'm assuming they are included in the resolution of thed -- of the advise and concept. it could be made clear in the ruds these are nonseverable and the way to withdraw them, and i think secretary kerry was asked about it this morning, would be to go back to the senate, and as i understand understanding the

secretary to be receptive to clarifying that one would need to go back to the senate in order to alter the ruds, and i certainly support that idea. >> thank you very much, professor. can you describe your specific concerns with the crpd with respect to sovereignty, the specific concerns? >> i don't know if this is specific enough for you, but we need a strong prescription that we get to decide for ourselves. the meaning of the treaty is we promise another country that, okay, we're with you on this. i think there have to be some basic limits about what we can promise. we can't have every aspect of domestic public policy up for grab, handing it off to an international entity or international process. i cannot think of a treaty that is at all analogous to the crpd

that covers a whole range of things about how american government or american private entities treat other americans, and we say we're promising the world that we're going to do this the way the world thinks it should be done. we've crossed a real bridge when we start making those kinds of promises, and if i could just briefly, in relation to the discussion we've been having with kirk bradley here. i think the danger of the rud's is not a court saying, ah-ha, got you, we're overriding it. no, the danger is, and this is foreseeable, this is likely, the monitoring committee in other countries will say, no, wait, you promised, and when you promise, you got to live up to your promise, and you can't say, oh, no, our fingers were crossed on this, this, and this. i think there's moral and political pressure to abandon the ruds, and i think it's hard for anybody to say, oh, no, no, no, there was a reservation so

forever more we have reservation. if we think we have leverage on other countries, we expect they have leverage on us, and it may make it hard for us to stick to the exceptions that we've tried to carve out with the ruds, and i think that is a problem. >> you may have answered my follow-up to that, but do you think the issues that you've raised can be fully addressed through the ruds? other than that -- this last point cannot -- >> the -- >> do you think the -- >> i think there's two different issues here, and one is can we anticipate every possible difficulty and pried for it in advance with a rudd, and maybe if we're real imaginative and worked hard, but the -- even then, there's the question, what does it mean to ratify a treaty when you say, well, we have 28 or 32 expectations we are taking, but otherwise we're a part of it. basically, if there's enough ruds saying we are not a part of

it, so if we are not a part of it, why pretend? there's that problem. there's the second problem which is on any particular one of these exceptions if the monitoring committee, the committee of experts says no, you're wrong. that's not a valid rudd. do we have the self-confidence to say we don't care what you said, we're america. we're doing what we want to do. do we have the confidence to speak that way secretary kerry did? i was uncomfortable. i'm as nationalist as he is. i don't know french, but that was awkward that he said, we don't have to do a thing, not one thing. he sometimes repeated that, we don't have to do one thing. i just don't think you can, in good faith, enter into a treaty and then say to the world, you can't complain we're not doing anything. we routinely have disputes in the wto, doesn't change our law, but when the apalate body at the wto says no which we do in america is wrong, we change the law. i don't think we find it easy to

just shrug off intergnarl criticism, particularly when it comes from the official committee that set up to decide whether we are in compliance, and i think any one of these ruds we find ourselves down the road saying, oh, okay, sorry, we're not supposed to do that. okay, we'll change the law. that bothers people. >> thank you for your testimony, all of you, and, mr. chairman, thank you for having this hearing. >> thank you, senator corker. i just have a couple questions for ms. west, and after all the time you spent here, we have to use your expertise so i know the main focus for the reason of the treaty is to extend the rights of 58 million miles per hours, five and a half million veterans, to find it more likely than not that they will travel someplace in the world for business, for education, for pleasure, and more likely than not find themselves having

standards of the access the as we enjoy in the united states which is the world's leader in the regard. that's the overwhelming compelling reality, but i think that your testimony, i think, is important. you know, our, for example, the technologies that -- this is not about this professor -- as was said, you know, american business, you know, that's not the compelling reason, but, mid 2k3w0 -- my god, everything we think about has pretty much economic dimension to it, and i think there's nothing wrong at looking at american leadership to the private sector in creating in the world standards that will have the citizens of those countries enjoy higher standards for their own accessn't as well as for ours, so our technologies that provide access to people in disabilities in the small niche market or a particularly large business opportunity? >> it is a huge market, and we

think it's just the beginning of the growing market. i think in the past few years with proliferation, for example, of a smart phone device, really pulls accessibility in the center. before accessibility, and sometimes people think of it just for people with disability, you know, vision or hearing impairment, but a cell phone really bring to play that every one of us can be situationally disabled. you can be driving a car, but you want to read your e rail. you need some kind of technology to read thee, for example, the e-mail through speech. so we see that as becoming what we call the human centric technology. because of that, think about aging population in the united states where 7 # 6 million people k baby boomers, in china, they will have 365 million people over age 65 by the middle

of the century so when people age, they immediately require accessibilities. the market is just at the beginning of growth so this is one of the areas that we really truly believe that you can do good while you do well, and we have seen that play out throughout ibm's history in the past hundred years, and we just think the crpd just really gives a forum and gives an opportunity for all businesses to partake in this and really do well while do good. >> you also talk in your testimony about the importance of harm harmonization of international standards in nothing furthering the interests of the united states in the global market for accessible products. there's been testimony here about entanglement in remote international deliberations.

aren't we, in so many sectors, very active in international bodies promoting standards so that we can try to generate closer and closer to american standards that will open the opportunity for our people as well as our business to be globally competitive 1234 >> yes. >> the standard is important, not just for technology, but for many consumer electronic in a daily area. .. >> it really gives it that extra

kind of moral benefit because technology in this case does allow people with disabilities to better their lives and employment opportunities, so it is really a great example of american innovation. innovation as it brings to million note, bread -- benefit to the entire world in general. >> thank you. thank you. i am glad we have that perspective for the record. let me close with some final observation. i think you seem to be missing a major point of secretary carries testimony. you stated several times that what the secretary said, the u.s. does not have any obligations of the treaty, it did not say that. what he has testified to is that we have already met our obligations under the treaty, so we need to take no additional action to comply.

i think that is a very significant difference than to say there are no complications whatsoever. we have taken those obligations. secondly, let me just say that the administration of today and at other times as to be listed that before this committee all legislation necessary to implement the treaty are already existing. so therefore the conversation that we have had about what that looks like is important both to amplify that and some make sure that there is no use that would undermine that reality. concern that the treaty could suddenly declare itself the arbiter simply does not hold water in the context of some of our history. for over 20 years we have been a

party to the international coven on several and political rights. many of a similar to those. despite any effort to expand its authority, our roads remain valid both internationally and domestically. time and again our courts including the supreme court's have affirmed the validity of our to the icy cpr and other in general. so i just think it is important as members read this testimony and make a considered judgment that they know some of that reality. finally to my have a statement from secretaries and 6:00 p.m. the disability tree and would

ask unanimous consent. with the thanks of the committee for your testimony and there may be some follow questions because the nature. we will keep the record open for the present business on monday. members to submit any questions that they have. thank you for your individual expertise and incite. this committee stands adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> friday march 50 years since the assassination of president john f. kennedy. our special coverage includes your calls remembering the day during washington journal starting at 7:00 a.m. eastern and at 10:00 a.m. there rarely seen nbc news coverage from november 22nd 1963 when they first reported on the assassination and we will take you live to dallas for a commemorative event from the lee

plaza including historian david mccullough reading from some of the president's speeches. at 12:30 p.m. and to boston from the jfk presidential library and museum for a musical tribute with james taylor. the u.s. naval academy women's league club performing selections for the president's state cheryl. and we will be joined by roll-call david talking some washington journal to discuss how about white house and washington d.c. prepare for president kennedy's state funeral. also, presidential historian and author will talk about the legacy of john kennedy 50 years after its death. later, paul gregory, a family friend of lee harvey oswald will be our guest. >> along a party-line vote the senate democrats' change the rules to limit the minority disability to by -- minority ability to block certain

presidential nominees. majority leader harry reid talks about the consequences of employing the so-called nuclear option. >> as i mentioned earlier, this country did really well for 140 years, the first vote on -- the first filibuster was in 1919. the country did great until then the filibuster's put in place to get things done has been turned on its head. now it is used to stop everything. so we have really tried extremely hard, and that is why i have been criticized by a lot of people for having gone through to congress's. and i wanted to get along. rodney king. let's just get along. i tried that.

and as i tried to explain, there is simply not telling the truth. look at what has happened. and the thing about this is we don't know -- they don't deny why they're doing it. that is what is so interesting. we understand all the considerations, but let's be real. what could they do more to slow down the country? what could they do more than what they're already done? we have all been in congress a long time. senator murray has been in this in a long time. all these happy talks coming

from my republican friends, you know you're right. and i say, why do you vote the way you do then? the vote together on everything. it is only to discourage the president of the united states. [inaudible question] >> let him do it. as i said, the country did pretty damn well for 140 years. so i think it went beyond seeing who can outtalk the other. this is good work done. let him do what every wants to. yes. >> in the minority. >> what i said on the floor. this is the way it has to be. the senate has changed. the senate has changed. look at what has happened.

we have a republican president, and we think that he should not have the team anymore. one thing that people don't understand in of want to try to explain this a little bit, the senate majority will not be a piece of cake in every instance. there is tough on the counter. they don't like some of the nominee -- no, this doesn't having served in the house, the majority rule, a different body, bicameral legislature. the majority vote is not so bad. >> in a few moments a hearing on predatory lenders and private military service members. and in a little less than two hours a look at what role the government may have been regulating digital currency.

>> if you are a middle or high school student c-span video competition wants to know the most important issue congress should address. make a five to seven minute video and be sure to include programming for your chance to win the grand prize of $5,000. $100,000. the deadline is january 20th. get more info. >> now, a hearing on predatory lenders who target service members and their families. the senate commerce committee heard about cases in tennessee, new york, and virginia. this is an hour and 45 minutes. >> have come. and the hearing is called to order. this month -- and this is a subject which i want to dive

deeply into. this will not be the only hearing. there are scandals of there. they have to be uncovered. what everyone does next. this month we celebrate veterans day and the remarkable men and women who make extraordinary sacrifices protecting our country. as we on this service and the bravery they have shown in complex across the world we should remember the challenges on the home front as well. this beginning my statement. like the rest of us, soldiers, airmen, sailors, marines, consumers. yen one said that, not experienced ones at that for the most part. vulnerable to consumer practices . they buy homes, cars, computers and other products essential to maintaining a household.

we are going to learn today there are steady paychecks and job security that makes our service women and men appealing targets for unscrupulous businesses. i have other words i would like to use, predatory loan products. you know about this. that is not something any of us should be proud of, but it is a fact. i am not sure that this has been dealt with in any committee before but it will be dealt with in this one and at length. one of the essential promises that we make to those who put their lives on the line to protect our freedom is that we will in turn on your service when they're own to uphold this pledge we must make sure that we understand the unique challenges that they face when they act as consumers. the special role in our society may require some special protections, whether that is regulations or bars remains to

be seen. rigorous training requirements and the relative isolation of some bases and make it tough for our military servicemen to comparison shop. and financing options, frequent moves demanded by the chubb which can include months on end in war zones, hence the victim's overseas as well as your can make tracking bills and negotiating with debt collectors virtually impossible. beyond that our soldiers, airmen, sailors, marines may also be particularly vulnerable to aggressive debt collection techniques. for example, many members of the military need security clearances to perform their jobs . you heard reports about us deeper into unscrupulous debt collectors in violation of federal law threatened to put military service members security clearances at risk by disclosing their debts to the commanding officers.

bravo for those wonderful companies today we're going to explore financial issues affecting the economic well-being of military households practicing involving small dollar loan products that carry extremely high long-term costs and aggressive debt collection tactics are servicemen may face when bills come due. many families across the country face emergency expenses at times when the monthly budget justice not covered all. there are a variety of lenders that want to help, offer their products out the bridge those financial moments, gaps. then it becomes a very different story, however, when these products involved predatory components such as egregiously high interest rates which in some cases top 300%, high fees

or waivers of certain rights hidden in fine print of contracts. we got familiar with that with the health insurance industry. other unfair or deceptive tactics, and it is particularly troubling with lenders using geographic proximity to military bases in target advertising techniques to encourage members of the military to enter into these predatory loans. young people for the most part. some of them are common, small dollar, high cost loan products, advertising specifically to military members that i have heard about including following, payday loans which take repayment from the borrowers next paycheck and carry annual percentage rates of two to 300%. installment loans for cash or retail items like electronics his interest and fees ultimately can total more than the original

price of the goods. and all but title lending when the loan is secured by title to a consumer's card which gives lenders leverage to increase loan rates under the threat of repossession of the car. we have done with that in this committee, not so much of service members, but when people move and hire a moving van and the band comes and picks up all their stuff. and then the band is 10 miles down the road and pulls into an off-road. i'm sorry. we did not charge will we were meant to. you either pay as are we ready. it is a lovely world. other concerning factors include various deceptive schemes used to sell automobiles to servicemen month. one example of a recent predatory scheme targeting

military members was uncovered by one of our witnesses today. tennessee attorney general robert cooper. general cooper will discuss in more detail his inquiry showing that the alleged fraud retailers' smart by with stores on the outskirts of military bases pushed insolvent loans of consumer products such as computers to military members at inflated rates through deceptive tactics such as undisclosed fees and high interest rates. despite projections in state and federal laws, state and federal law, consumer advocates report that military servicemen are still being harmed by these predatory practices. one recent news accounts highlighted the case of a marine staff sgt took out an auto title alone for a thousand $600. and not realizing that the fine print of the contract required and to pay back more than

$17,000 over two and a half years. so obviously he fell behind in his payments. and his car was repossessed and sold at auction. how we honor our servicemen and women. a federal law calls the military landing at supposed to protect servers members from this kind of abuse but did not appear to apply in this case because they only cover loans with the term of six months unless. this is clearly a loophole that needs to be closed. today we're going to learn about train is an unfair and predatory business practices from a group of individuals who are leading the charge to promote consumer protection for our military. they have been working very hard , this group of folks in front of me, to promote partnerships among consumer advocates at that basic mistake, and federal level, and the hope that the testimony today will help inform us about the best ways that we can possibly build

on these efforts. our military is prepared to give the full measure, that is, our soldiers. we owe them the same when it comes to protecting them from unscrupulous practices at home. and i just want to say, unnecessarily but necessary to me, i spent ten years in the veterans ready trying to prove that we were finally successfully, with the department of defense not necessarily looking after these folks that i am talking about, doing something called the gulf war syndrome. does anybody remember? soldiers, sailors, others were told to take something called bromide which had not been cleared by the fda and even for animals. there were forced to take it by the department of defense every day. tens and tens and tens of

thousands, hundreds of thousand people. it was their fault or that there was any problem. and ten years later no thanks to the department of defense they admitted that they had been wrong. the distinguished ranking member , the urban state of south dakota. >> thank you, mr. chairman, holding this hearing to examine unfair financial practices. is something that i am sure all of us as members of this committee care about. i also want to thank our witnesses for being here today to testify. south dakota is home to the air force base where there are more than 9,000 military personnel of family members and civilian employees. in addition there are 4,250 air guard and army guard members to serve in my home state. i am proud of their courage and grateful for their sacrifice and service to our country.

i certainly do not want to see them or their families subjected to unfair financial practices. this year will highlight the types of unfair practices in financial fraud that may be targeting military men and women in the education and assistance programs available in the law enforcement efforts undertaken to eliminate the worst practices and scams. service members are not immune to the problems encountered by taking on too much debt. the unique demands of military service may exacerbate the negative consequences for too much debt. for service members on like ordinary consumers failing to pay any kind of debt is considered an offense under the uniform code of military justice which could lead to a loss of a security clearance or even result in administrative discharge. admiral mike mullen then chief of naval operations was quoted voicing strong concerns about these issues in the june 2006 article were restated, and ' i sailors financial reticent -- ready is directly impacts in readiness.

as mentioned, the number one reason that sailors were losing a security clearance. this was affecting overseas deployments. the to the efforts congress took notice of those challenges and enacted a military lending act in 2006 that law has largely been a success, currently considering whether its rule implementing the military in the neck is to be updated it to the department of defense takes the issue of financial readiness seriously. i appreciate the department has made great strides to enhance education, training, and counseling by beginning financial train ride from the start during basic training and continuing throughout the service member's career. as the issue is examined it is important to ensure there is a proper balance under practices in the rye fraud. hope we can use this hearing to highlight the financial assistance and education efforts that are available to service members to make informed

decisions legal assistance offices that offer financial education counseling. early 40 hearing from captain alexander his shares and those services office about his role in supporting and advising service members when they fall victim to financial fraud. and also afford to hearing more about the consumer financial protection initiatives and define the federal trade commission and consumer finance protection burro. we are privileged to have betrays a jealous of her efforts with the offers of service number of shares of the siepi be and that she is visited serve personally. i also want to call attention to military consumer protection they wish to sell for the first time this past july. they provide resources to service members and family to protect them against fraud. a military and national security and these brave men and women that protect us all over the

world should not be the victims of unfair practices and how. i think you for holding this hearing. we look forward to hearing from witnesses. and i would ask there is statement here by the american financial services association that would like to have included as part of the record. >> mr. chairman, may ask you a question? why in the world with the department of defense constrict the definition of consumer credit from the very broad consumer protection bureau that we with the joint chiefs of staff urging is passed in 2006? >> i do not know the answer to that question, as i do not know the answer, rather shocking thing. i think in most parts of the department of defense, maybe not

all the services, but most of them that when soldiers and men and women leave the military, their time is up. they don't get health checkup. they get no help checkup. so if the person has ptsd it will be for somebody else to find out. the person as mental health problems and will be for somebody else to find out. i can answer your question, and i can't answer my question. it is a very, very good group. i thank you very much for coming let's start with the hon. robert cooper. >> thank you, mr. chairman, chairman rockefeller, ranking member, a committee member. it is an honor to be included with this distinguished panel today. i congratulate the committee chairman and this committee for taking on this important subject i want to use my limited time to

talk about the case, as you alluded to, that we handled in the tennessee attorney general's office against companies that were targeting soldiers in tennessee with numerous on lawful business practices. after i've done that i want to touch on just a few lessons that we have learned from a litigation. the lawsuit began in 2005 when the tennessee attorney general's office filed a complaint in state court, obtaining a temper restraining order, asset freeze, and other relief against a seller of computers and other electronics. rome finance company which was financing those. these companies were targeting active duty soldiers at fort campbell which is on the tennessee kentucky border north of natural. our lawsuit alleged that they engaged in numerous unlawful practices and some included operating without a proper licenses, claiming the prices on computers and electronics for a

great deal but instead price gouging soldiers by marking a product by as much as 300% of the manufacturer's recommended price falsely representing that there products for new when, in fact, many were returns, liquidation purchases and the defective equipment. falsely claiming that they were offering 0 percent financing. this was called a different time refinancing, when the present military financing, special programs for service members, but it was really an 19% a pr.

responded to this, the state court judge observed in his decision, quote, while the thought of what he's soldier's families had to endure when they were killed in action is unbearable. the fact they had to endure months and months of unnecessary collection built -- billings is beyond comprehension. as an addendum to a written statement we have included findings of the court. three years after the complaint was filed in august of 2008 the court granted the ultimate sanction toward the misconduct it entered a default judgment against the company. at the hearing, that day, the state presented i.t. its case.

who was on business with the companies and the court ordered that re constitution. canceled and the soldiers were allowed to keep their computers. lilled toik say the case was over at that point. but it wasn't. the finance went to california where it was incorporated and filed a chapter 11 bankruptcy in an attempt to enjoy the state court proceedings. fortunately it failed. and we negotiated with the trustee in the case to obtain approval for the ties piersment of $2.2 million for the assets. has been used to provide restitution to almost 4 sthowrks soldiers who bought merchandise from the companies. ly say that the hearing from miss nelson they are now doing

in new york and subject of investigation by that office. let me talk about some of the lessons we learned from this litigation. first, many unscrew up louse businesses that pray -- prey on our military. in their strategic partners were sophisticated nationwide operationals with tins of millions of dollars in cash flow. they had financial resources and expertise not only to hide their assets we -- but to close and reopen where opportunity called such as in new york. second point deal with the obstacles we ran in to in prosecution. in our case, they claimed it was a duly licensed consumer lender in california. it was not. when these companies failed to register it was an even greater

burden who had administrate proceeders that deal with the license entitieses and went to court. the cost of proceedings again these national operations. here, as i said, the company went to california to file bankruptcy to escape the tennessee judgment. as a result our lawyers had to go to california several time. it was not cheap. fortunately we had the resources to pursue this, but it can be a real financial challenge for state attorneys generals to obtain judgments and have to chase the defendant around the country to collect. a number of factors the committee alluded to make them vulnerable to sophisticated --

less experienced and sophisticated about financial matters. a large number of soldiers who purchased computers were motivated purchasers about to be deployed and once they were lock to the abusive financial agreements they were afraid it would be viewed negatively by their commanders and harm their advancement so they were hesitant to report. now another significant problem encountered by soldiers involved the use of a automatic deduction from their paycheck. they were difficult to stop. but i want to point out one thing, and the brief time i have

left is the importance of financial education of young soldiers and communications with young soldiers and their families. they need to understand not only how to manage their finances but to feel comfortable talking about their problems. we became involved in this case, only because a number of soldiers complained to the consumer affairs counselors who then brought it to our attention. if they had not been doing their job talking to soldiers and as well as doing their job in talking to our office, this case may not have come to light. that communication needs to go on not only within the base but between the ways and state enforcement authorities like the attorney general's office during the litigation we met and talked regularly with the commanding general down the chain of command to the civilian consumer protection. and current lo working with consumer affair counselors to develop training material and consumer protection issues

specific military bases. so that communication is extraordinarily important. that's reason why it's important to have holy petraeus leading the effort to protect servicemembers. she and i have visited together other bases in tennessee. she's spoke earlier at the bipartisan conference of state attorneys general in nashville. that dealt with issues facing military bases in the south. and i can personally attest to her unique ability to facility communication between military and civilian authorities. so training and financial literacy is important to all aspects of society. but it's a particularly important to maintain a military force readiness and morale so our men and women in uniform can focus on their mission and not worry about their financial condition. fort campbell is doing a good job. but we understand a military can't assume the entire burden.

that's why we need a strong partnership the military, federal agencies, state consumer offices, and state attorneys general to protect our men and women in uniform from consumer fraud. thank you, mr. chairman. >> thank you very much. >> holly petraeus has been with us before. everybody admires for her what she does. she knows what she's talking about. i would not want to to be on the wrong cider had. please proceed. thank you, chairman rockefeller, ranking member thune. i appreciate the opportunity to testify today. for those who are not familiar with the office of servicemember affairs we're responsible for educating servicemembers and

their families to make better informed financial decisions. for monitoring complaint to the bureau from servicemember and their families and for coordinating with other federal and state agencies on consumer protection measures for the military. my mission dice in directly to the issue of med or it lend together military. i lived on or near military bases my entire life and seen it outside the gate offering everything from furniture, to used car, to electronic to jewelry and the high cost credit to pay for them. in the early 2000 there was an alarming increase in the number of businesses offering payday loans and an increase in the number of sf members taking advantage of the easy money often without the ability to repay what they borrowed. the pentagon took note it was beginning to take a serious tole on military readiness as did the

media. professors chris peterson described, quote, an environment where servicemembers are literally surrounded by lenders clam moring to charge annual rates averaging around 450%. in 2006, as a request of congress the department of deference published a report predatory lending practicing directed to members of the armed forces.

the mla to cover member of the armed forces are dependent of a member at 36% and creates other con studenter protections as well. the department of defense of given the task of writing the regulation for the military lending act and opted to define consumer credit as only three types of loans defined farley narrowly. auto title loans, closed and loan with term of 180 days or fewer. and tax refunded to participation loans which are closed and credit. for those products that fall within the department of deafing in the law had a positive impact. but the concern now is that lender have easily found ways to get outside of the definitions. in my three years i have been to 70 bases and national guard units. here are a few of the stories i've heard. the spouse of a wounded warrior in the illinois national guard

took out an auto title loan with an apr of 300%. the finance charges on the loan were over $5,000. the loan was not subject to the mla because it was longer than 181 days. servicemembers from north carolina and delaware each took out loans at 584%. they were not subject to the acts per text because they were-open-ended line of credit. a sailor had one loan and another at 197%. neither covered by the mla. he was paying over 66% of his take home pay on the two loans. concerns about the effectivenesses of the current rule have lead to renewed interest from congress.

just this morning the bureau announced an -- payday lender cash america. which made loans in violation to the mla to hundreds of servicemembers. as part of the enforcement action the lender refunded them for a total amount of approximately $33 ,000. it put additional compliance mechanism in place and agreed to increase training on the mla for the customer service represents. this is great example that can be achieved. to vade the current regulation. the original rule was effective for the product it is covered. but over the past six years we

have seen significant changes in the time of product offered and the contour of state law. tactics that are plaguing the current rule. i believe from a military point of view it makes no difference whether it's made bay depository institution or nondepository institution. no matter who offers it. in sum the underlying goal that protecting military and financial readiness that lead to the passage of the mla in 2006 are as important today as they were when the act was originally passed.

there's little we can do under the current regulations because they are longer than 91 days. i look forward to working with you, the department, and all who have an interest in accomplishing these goals. thank you. >> thank you very much. you a 1,000 people working? >> i wish. i don't mean personally. >> you love sequester? >> yes.

>> please proceed. >> distinguished members of the committee. thank you for the opportunity to describe the consumer protection effort on behalf of servicemembers and family members. they dedicate the protecting servicemembers, veterans, and families for fraudulent practices. the case against one of the large the defendant mortgage investors corporation allegedly -- of refinancing services offered to veterans and continued to do not call.

the they obtained a sizeable 7.5 million penalty to remedy the violations. in addition to the targeting military consumer perpetrators of scams have been known to taylor their representation to the unique circumstance of military consumers. for example, in ftc goldman schwartz the defendant debt collector used military-related threats in attempting to collect from military consumers. one reported that he identified him as, quote, a military liaison. and the collector would ruin the consumer military career. and important resource in law enforcement action is the consumer and complaint

networking secure online data base of more than 8 million consumer complaint. in 2008 data from consumer military show the top financial complaint category are debt collection, unlawful baking or lending practices and scamming offering mortgage foreclosure relief. these complaint categories are ftc. complimenting these consumer protection law enforcement efforts is the commission's robust program. they assembled the material that addressed cop siewfmer

challenges faced by servicemembers, veteran, and families. particularly when using -- they will find among other things information about payday loans, credit port active duty alert, and schemes associated with veteran's pensions. such an issue we launched this year. on july 17, events around the country the ftc and others including dod, military, and my colleagues hosted the first military consumer protection date to increase awareness that consumer protection issues that affect servicemembers, military families, veterans, and civilians in the military community. help them make better informed money management.

we know it will be even bigger and better. they coordinate with the partners on military policy initiatives. for example through an inner agency group they are coordinating with others on possible amendment to the military lending rule. the commission and i should add staff is grateful for the sacrifices that servicemembers and families make and we are dedicated. thank you very much. >> thank you, sir. miss nelson. assistant attorney general in charge of the water town regional office and new york attorney office. can i calm you general nelson? [inaudible] assistant general nelson. deputy general nelson, please.

>> thank you. this is an important issue in the attorney general sneiderman pleased question be represented on the panel. because there are just so many different ways in which they're being victimized by unscrap louse businesses who are looking to make a buck. one of the first and largest cases under my tenure at the office has been the smart by case and general cooper points out these are the same cast of characteristic doing business in tennessee. as were being shut down in tennessee they changed their name and set up outside the gate

of the local mall. they had set up the same scream. a beautiful marquee in the mall with a lot of military focus. we would not have known that this was a problem in our area, but for the fact that soldiers had come in to my office seeking help because they didn't know why the computer wasn't paid off yet. i think it's an important item for everyone on the committee to recognize is that sometimes these predatory lending products to not look predatory. so when we initially look at the contract, we realize that it was showing an interest rate of approximately 19 percent. anyone who has done the sort of work is used to seeing triple digits. we didn't understand what was going on until we dug in to the transaction itself. i think it's an important consideration for the committee and other legislative body that are looking at military lending

act to saying perhaps not the number if you have to look at the transaction itself. and for example, in these transactions ash many other transactions which target military whether they are selling jewelry, whether they're selling continuing education product. the devil is in the detail. you need to look at the value of the underlying product. what we found that the computer of merely the bait to get the soldier to sign on the dotted line. when we sent the representative to look at the marquee and see get more clues what was going on. we realize they'd wouldn't sell her a computer. she was an older woman who had worked with our office for a long time. they suggested she go wall marted. she was likely where they purchased the computer in the first place. and we called some of of the staff of the organization in to our office to get more detail we learned that is exactly what they were doing. buying the computers from costco or walmart or sam's club. remarketing them.

taking off the label and put on a new sticker so it appears it was something they were selling directly. tripped the price and took the 19%. when you dug in to the transaction i.t. you realized that the computer may have been an $800 computer being sold for 124*d $24 00. the prices for portrayed to be military per paycheck payment. if you wanted to buy the computer it might have been $60 per pay period or $120 per month which seemed reasonable. as long as they could get the soldier to sign on the line. get theback information, which could happen in less than ten minutes that is all they were interested in doing. we found them in multiple other states. we were able to shut them down

in new york. they are doing business in texas, california, colorado, north carolina, south carolina, oklahoma, georgia, and the point is they were operating under different names in the places. if you ran it the secretary of state record you wouldn't find them. they had different names but the same scam. so the attorney general wanted to make sure that this committee understood that you have to look at more than just the face of a contract and realize that $3,000 worth of debt is not secured by a $600 computer. and to make sure that going forward the regulations that are ultimately nut to place are going to take in to account the true nature of the transaction and understand these scam artists, which is what they are, are going find ways to redraft existing agreement so they can continue to tap in to those soldier's paychecks and make sure they get paid. they have something they can sell and inivs --

invest in. i'm pleased the committee is digging to the issue and taking steps to take care of our soldiers in this way. because they are getting attacked on many fronts. thank you very much for your attention to this matter. >> it's a sham. -- shame. that's for sure. in the question we'll have interesting discussion. now we come to now i'm confused again. you're a retired navy captain. ynt call you mr. duane alexander, can i? i have to call you captain alexander. [laughter] thank you, mr. chairman. chairman, ranking member, and distinguished members.

i'm honored and humbled to have the -- >> excuse me, sir. i did not mention that you were a legal assistant attorney for the mid atlantic region legal service office of the united states navy. >> thank you, sir. >> i'm honored and humbled to -- servicemembers we support. i'm a civilian legal assistant attorney. and now called the regional legal service office. my job to enhance sailor readiness by addressing legal issues. i want to start by thanking the member of the panel and the servicemembers i cidely black the con tegs issue we addressed. they attack the servicemember financialses impacting the individual, family, and mission readiness and effectivenesses.

i've had clients that purchase two cars in one day. they have been trained to trust and follow authority. they know this and take advantage of that. in one case i was able to cancel the contract and the next day the carrier commander came to the base and to our command to thank us to explain what that impact meant. in his experience if the sailor had to pay for two vehicles he would have no none. he wouldn't be able to go out and eventually begin to act out. it would become a disciplinary

problem. if he wasn't separated it could impact his job and the fighter jet he districts on the flight deck of the aircraft carrier. for servicemember distractions to be dangerous and potentially fatal. he's not my only client. he's the typical client. they are young. for them the pay is gawrnt teed. t recession proof. when the reseg hit and cars couldn't be sold my guys could buy car. it's public knowledge when they go on to a business with a few questions people know how much they make already. their pay is easy to garnish. when they shop for a car there's nobody to go with them. they move every three years. there's no history that follows

along saying this is a bad area and bad business that isn't developed. they have been trained to respect and respond to authority. that's critical for us in the military. when we ask somebody to swab a deck it's not a debatable issue. the problem is for young people it's not something they turn off. when they go a business and the retired somebody says you need to do this i'm going take care of you. they comply. and the compliance leads to financial troubles. their job is 24/7. we regulate every aspect of their life inspect is what they do. for most it's who they do. that has a threatening impact. and i've had clients that paid bills they didn't owe but just arrived and rather than have their name smudged before they the commanding officer they

dangered their funds and paid the debt. that's just wrong. these factors combined to make the servicemember not only a vie a value target in the consumer market but vulnerable to attack by unscrap louse actors. arbitration, servicemember backed waiver and aggressive debt collection. and not good things to do. however, when there are is no other option and they have been exhausted they may get the loan knowing it's a bad lon. it's the last thing that gets reported. i the time we get awareness it's a catastrophic event being dealt with. it --

and most i see in the practice are with used car dearpship. there are a few that create some are finish us. but used car dealership are the primary one. the one-time purchase can be devastating. they are located as close it the base as they can. they provide -- place in deeper in debt. the loan can be made for up to 140% of the vehicle valued. the dealer to receive kick back for higher interest rates. they can be powerful they add in excess i are or put in zip code there's a higher value for the vehicle. they require secondary loans to add money to the contract. this process make the sailors equivalent of a money delivery

system for the automobile lending industry. and we use it as a the waiver e vis rates of the lead back. education help some problem like arbitration and the servicemembers -- and aggressive debt collection are beyond education. and my job we are working with the federal trade commission to develop video that can be shown in the hurry up and wait time in the lobby of the medical room or the supply or legal waiting for services or returning from

deployment. you can get education on consumer issues and feeding them that way and try to take care of it. we have required general military training on payday loans. to address unscrap louse businesseses to the best of our ability. but still the problems create such a hazard for servicemembers and some of the issues, the servicemembers waiver and the arbitration being in the contract are thing we can't address because they're legal. and we need help to deal with that. thank you. >> thank you very much, sir. i'm going ask a question. i almost question my question before i ask it. i want you to talk about -- you all talked about the vulnerable. the young age.

families in the process of moving overback overseas again. people don't understand the terminology. they are accustom of dealing with it. i look at some of ads these companies send out. and all lack like they were, you know, representatives of working right out of chuck hagel's office. they're all military and all services u.s. military around the world since 1999. then they have a testimony from one very wonderful looking woman soldier. she says, "after there was a mistake with my pay, i didn't know how to make ends meet." luckily they understood my

situation and were willing to help me when i needed it. thanks for helping me. here it is written. and people are going fall for that. they're going fall for that. so my question to you, who two different consumer protection agency, to speak. what can you do in outreach and education? what is it really possible to do? , i mean, these folks are changing. they get a video display or whatever. how can you really reach them? well, mr. chairman. i think you are always going have to have a cooperation of both education and protection. when it comes to education and outreach there are a variety of things that can be done.

i think you have heard some today. we are doing our best at our agency to do a combination of things. i personally have gone to 70 different military installations in part to put a they on the bureau. what we do i hear about financial issue. if it's a large group of young servicemembers i throw in a little bit of consumer protection common sense when i talk to them as well. we're developing some education product. one to be delivered before they get to basic training. because basic training is kind of a stressful time to ash sort good financial education. you are tired, stressed, scared of the drill instruct per. you may not be hearing the good information. we are going to do a little product that can be accessed by computer before they get there with some basic -- >> what would be the setting for that? they would be out in the field? >>. the delayed entry when they

joined the military but not yet gone to boot camp. the only contact they have is with the recruiter. the recruiter will deliver it to them. the website go to the website. take this short financial course and show me you did. we're hoping to catch them before they get the first military paycheck or get that first trip to the local mall when at basic training and may be templed by the kiosk they find there. we're hoping it's one approach that might help. we are working with other federal and state agencies that has 16 state attorneys general go with me personally to military installations to say we are here to protect you in this state as consumer. we work with the ftc, as you've heard. we also have worked with the national state legislature and a

number of the non-profit that put in the military space. we are doing some trainer efforts from our office. doing web their video events from those who deal with the military issue like the financial program managers, j.a.g. the trying to give them the latest information about current rules and regulations that are in effect. we put our regular publications, we also help relay the transition assistance pardon me for those transitioning out of the military. there's a variety of things that can be done. we can always do more and better. again, education is essential. i think it has to be combined with the protection of loss as well.

>> i couldn't agree more. and, you know, on the law enforcement side, i can tell you that there are some law already apply to misrepresent the military. i talk abouted a case the ftc filed this summer involving mortgage investor corporate. and to have that language was helpful in the law enforcement efforts. representation about affiliation of the government agency or military but also violate the mortgage assistance release services. they are still enforceable by the ftc. and the cbb has the authority to enforce the rules.

and affiliation talk about affiliation violation of those. where generally on the enforcement side. representation about being affiliated with a government entity when the camera not violate the ftc act and involved with that as well. so all of those things that's the law enforcement side. it's obviously critically important do that because you're right. the problem is that by representing the folks are somehow affiliated with a legitimate agency they get instant credibility with the consumers in had this case military consumers. and they may well let their guard down and not be as aggressive in term of the question they ask and no be as to the education message we normally try to get to think about. education ask still an important part. i think you asked about some of the educational we have made.

actually i want to go something back to mr. alexander mentioned. he talked about one of the new educational issues we have been experimenting with specifically with in nor folk. that's the idea question use wait time in the military. it terms out servicemembers spend a lot of time waiting around and not doing a lot. and working with mr. alexander. we can use the wait time opportunities to deliver educational message about a variety of scams foresee and through video and waiting rooments on ships, coming baaing to shore. those are all great opportunities for us to -- organization to let the soldier know about it and the sailor in this case know about the kind of scam that may target them.

i'm trying to think of these soldiers. you don't really learn how people can take advantage of you until they have taken advantage of you and the security and three car you paid for you never bought. you have to go through it. i'm not sure it's in the nature of 22-year-olds, 25-year-olds who are, you know, in the middle of preparations for war going back to war. the discussion affleckture in a waiting room on his time. i'm taking all his time already. that they'll listen, learn, but will it actually make them sharp and confronted by these scum

bags, as i would call them. if you have more of the servicemembers all potential victims. all going to be in these why can't we go after. i asked a question that john can do whatever he wants with it. go after of the perpetrators. i remember during the health insurance matter in this committee, the we had these outrageous sophisticated, unsophisticated people. it wasn't really until which

turned out they were setting the rate for all insurance companies all across the country but people didn't want toed admit it. when they got taken to court in the city of new york, i believe, maybe stat of new york. they ended up paying i think $350 million. that, i think, might understand. it's a question of human nature evolving in to sufficient sophistication is the question of us at the proper time. you are just getting rolling, mr. chairman. >> thank you.

coming to office the first top is to document the problem of put on the form. that form the front part of the form is -- that there is a problem. the precept of the board said we can't take on individual issue. we take on the sailor's case. but if we get three or four egregious act we think would be impacting multiple servicemember then the board will send an invitation for that party to

come forth and explain what the process is. it's one of the,s we have been successful in addressing so. of it in the area. we put one-off limit and the seattle may drop from 40 to 60 cars a month to 12. they begin to think about restructuring the way they do their process. we work with the board carefully in doing that and documenting the cases and bringing them to the board for action against individual businesses. that are causing problems there. thank you. i'm wondering if itst collected or number affected by these issue ease and what does the data suggest or reflect in term of trends in the last few years. is the problem getting much worse? staying the same?

>> we've gotten at this point just over 11,000 complaint the from servicemembers. and mortgages top the list. challenges with mortgages. but we only started taking complaints about debt collection several months ago. that's already trending upwards so fast it's been number two complaint item we're getting. so i think there's definitely a sign there that is something that impacts servicemembers quite a bit. we put out an advanced proposed rulemaking on it. we are soliciting comments from the public through the tenth of february. beare interested in having a military component to the

comments we receive. because from what we've gotten in our military complaint is pretty obvious debt collection is one of the biggest challenges that servicemember seem to be impacted by. base to base or state to state? >> i would be for hard for me to expound on that right now. i think certainly i see dpircheses between some of the issues that impact, for example, the national guard, the reserve versus active duty. they're more impacted by employment issues. issues g.i. bill issues heavily marketed to by when they go to use the g.i. bill. that's something we've heard a lot about from the guard. state by state we is certainly take look at the complaint and

get back to you on that. i haven't seen any dramatic differences from one state to the next. >> okay. >> do you work with the office of consumer response tone courage servicemembers and regarding their concern and health insurance the resolution? yes, very much so. i have two folks within my office working on consumer response issues. one of them pretty much does a full time job of working with the office of consumer response she's a recent army j.a.g. she's a really excellent person doing this. she has a real knowledge of the laws that affect the military and that can if value-added both in the review of complaints that come through. but also in training consumer response folks. some of the military specific issues that may come in with complaints.

do they share with it military officials? >> if there's a component especially if it's something we don't enforce. we share it with dod and the department of justice civil rights division. we have a real three-way conversation with them. inspect fact one of the first things we can was -- with those two entities so we would be sure there was no military complaints that fall through the crack we specifically covered. >> okay. i would just direct them to the panel and the entirely and whoever like to. not all short term loans are definition by predatory. what should i be on the lookout for? >> ranking member i would suggest a couple of things,

obviously, in transactional situation, where there is high pressure sales tactic. it ought to be a red flag. sign now or lose the deal that's clearly a red flag. i encourage a servicemember who is presented with any sort of contract or finance agreement that in any way is confusing to ask for the opportunity to take it back to the base and have someone look tat. and if the merchant is unwilling to to that. i would say it's a big red flag. anything else? the first thing sometimes forget to consider they have a military relief study that make the emergency loans and grant at 0 percent interest. so if it's a true emergency, that should be the first place they're looking at. sad stliems it's not. in fact when i was --

we a young soldier that got up to tell the story which was that he needed a loan to -- a family emergency he didn't even think to go on post. he went on the internet. and he got a horrible belie expensive loan and ended up paying more in fees than it was for. he could have gotten a 0 interest loan he known to go on post. that's the first place i would like to look if a true emergency. obviously possibly on base bank or credit union would be another source of a loan and reasonable rate. thank you. senator ayotte. >> thank you, mr. chairman. i want to thank the ranking member for being here. and good to see you, general, we

had the opportunity serve together and good to see you today. i wanted to ask you attorney general this issue came to my attention as well new hampshire made the decision while i was attorney general to cap the interest rate at 36%. there were example of pay-day type loan. they were paying as high as 500%. i was very interested as i looked through testimony about the case that you brought against finance did you do that under consumer protection act as an unfair, deceptive practice? that is a tool that many attorneys general have and i wondered if you felt it was a sufficient tool or many of the attorney general were using that tool to try to go after businesses within their jurisdiction that were, you know, if there were ties with their state to use that consumer

protection act to go after these predatory lenders. >>. senator ayotte, good to seeu as well. and, yes, to answer your question our lawsuit was brought under our tennessee consumer protection act. saying that these practice practice were falsely misleading. >> has that been a good tool for ag. is it a sufficient enough tool? i guess i pose as well we have the panel here. the way i see this right now we have the authority of the state ag under the consumer protection act. so you action that the ftc could take. then we now have the cfpb working on the issue. mrs. pee tray yous, thank you for everything do you. how do they fit together to make sure we maximize getting out i know all of you are talking about education. and i fully agree part of what we do on our consumer protection

sackett making examples of people so other people can understand not to fall or a scam. i wanted to get your thought. you think the consumer protection act is a good vehicle at the state level. how do you think about the three agencies working together best to make sure that we're working together. doing the right thing. and getting the message out? >> yeah. i suspect that the effectiveness of the state consumer protection act will vary from state to state. we found ours to be effective both in term of what it prohibits a the state level. we take the position that, you know, where action also violates

. >> we also get dance because we have the ability too seek con junkive relief. we have a variety of tools in that tool pack. we work closely with whenever we can partner with federal partner. particularly on as we encounter more and more of these companies. that are national in scope. and where, you know, we need to go all over the nation to pursue it. that is so much easier and more effective whether we can do that with the ftc or cfpb or other federal agencies. we should being working as best we can. i value what the ag do at the

state level. and states state laws may go farther than the federal law. did a join sweep of some egregious that resulted in a number of warning letters and also some potential enforcement actions. i think we can be very effective together, and also in combination with you and there are gaps in the law where things aren't covered either at the state or the federal level. >> second or third, i guess. my experience has been that very strong. in term of information sharing the ftc's consumer complaint data base is shared widely.

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>> who is the best to deal with it to make sure we hold these people accountable and get the message out to let people know these bad actors are out there, and they shouldn't go down that road. >> >> thank you, senator ayotte. we have been joined by senator -- [inaudible] >> thank you, mr. chairman, very much, and thank you for holding this very important hearing, you know, because people who serve us in the military, are heros, but heros need help. they make us secure, but they actually live with insecurity in terms of their own personal financial circumstance, and so we have a responsibility to put them in kinds of programs that help to ensure that that security is there, and we have to make sure there's a safety net ready so that they don't have to run to predatory payday