Skip Navigation
Regional News
Holly Petraeus (right) and Sen. Kristen Gillibrand at the Fort Drum Commons. Photo: Fort Drum via Facebook
Holly Petraeus (right) and Sen. Kristen Gillibrand at the Fort Drum Commons. Photo: Fort Drum via Facebook

Senator Gillibrand, Holly Petreaus talk to Fort Drum soldiers about financial scams

Listen to this story
President Obama has proposed a new mortgage relief program for membres of the military and veterans. Major lenders will review forecolusres or denials of re-financing. if wrongly foreclosed on, service members will be paid back their equity, and get extra compensation.

Service members are vulnerable to scams, bad deals, and complicated financing. Many are young and inexperienced in managing their finances -- and frequent moves can make them easy prey when they're feeling financial strain.

The problem is serious enough that an entire federal office is now devoted to protecting military families from financial fraud and abuse.

Senator Kirsten Gillibrand brought Holly Petreaus, wife of CIA Director General David Petraeus, and head of to the new Office of Servicemember Affairs to Fort Drum last week. The office is part of the federal Consumer Financial Protection Bureau.
About 200 people turned out to hear about the office's work.

Joanna Richards was there and has the story.

Hear this

Download audio

Share this

Explore this

Reported by

Joanna Richards
Watertown Correspondent

Story location

News near this location

Soldiers and family members took turns telling their stories about difficulties with student loans, mortgages and more. One soldier stood up to share his experience with an online payday lender. When he found out a grandparent was ill, he borrowed $500 and soon found himself paying back more than twice that because of high interest. He said he didn't want to see fellow soldiers get into similar trouble.

Neither does Holly Petraeus. That's why she came with Sen. Gillibrand to speak at Fort Drum. She works for the Consumer Financial Protection Bureau, a new federal agency that came out of the financial meltdown. She runs the office that deals with scams targeting military members. It began its work in July.

"And, for the first time at the federal level, it's not just banks and credit unions, we can actually do non-banks, outfits like payday lenders, mortgage brokers, private student lenders and even the credit reporting bureaus". 

Petreaus said she'd visited 17 military installations in the past year and had heard several issues come up again and again. The housing market can be particularly hard on military families. A family may buy a home, but then gets orders to move to another installation. They may owe more on the home than it's now worth. And some of the help that is available to civilian homeowners under water just hasn't been available to the military. 

"Because they were being told things like, “Well, you have to be delinquent before you can get a loan modification.” Well, nobody in the military wants to do that because then you worry about your security clearance. So I've raised that issue. And sometimes there's the case of, “Well, you're not living in the house anymore, so you can't do a loan mod because it's not your primary residence.” So we have gotten Fannie Mae and Freddie Mac to change their guides to servicers, saying a military move is a qualifying hardship for somebody to look to get help through their programs."

Student loans can be another burden. Many for-profit colleges target military members with offers of convenient online classes. But not every offer is a good deal.

"What you need to do and what we hope to do is make it easier for you to shop around and see what that college's track record is and what is their graduation rate? What is their dropout rate? What is their student loan default rate and what is their accredidation? That's all stuff you should be asking. Not just shopping because they say they love the military and they make it easy for you to take online classes."

And then there's consumer debt things like credit cards, loans and household goods with exorbitant financing. A company called SmartBuy at Salmon Run Mall in Watertown was shut down last year by the state attorney general's office after targeting military members here and outside other military bases with outrageous financing deals for electronics. 

Lieutenant Colonel William Ellis attended Friday's event. He says payday lenders are a serious problem, especially when soldiers are transferred. 

"And they're looking to get into, to move into apartments and so forth and so, talking about initial deposits and things of that nature, if they're running short of money, they're a young family, you know, they'll see that guaranteed loans and they'll take advantage of it or what they think is taking advantage and really it just puts them into financial issues."

Holly Petreaus urged soldiers to look carefully before signing contracts and to talk to JAG officers, the military's legal experts, if they have any questions.

A new national database will help consumer advocates fight abuses of military members like that perpetrated by SmartBuy. It's called the ROAM database, for Repeat Offenders Against the Military.

Petreaus says the database will allow law enforcement across the country to see when the same company is operating in several states. That will allow investigators to build larger lawsuits, rather than go after each individual business outlet.

Petreaus and Gillibrand said they'd continue to fight for fair treatment and education of military members in the financial world. And they also recommended the Consumer Financial Protection Bureau's website for complaints as well as guidance on choosing sound financial products. It's at

For soldiers seeking low and no-interest loans, there's the Army Emergency Relief System, which soldiers can connect with through their leadership or at


Visitor comments


NCPR is supported by:

This is a Visitor-Supported website.