On April 28th 2023, the U.S. Senate finally passed new legislation meant to protect U.S. service members and their families.
The bill, known as the Servicemembers Credit Monitoring Enhancement Act (also known as H.R. 1521) will expand the protections included in the existing Fair Credit Reporting Act, and ensure that anyone who is currently serving our country can protect their finances while deployed.
About the Servicemembers Credit Monitoring Enhancement Act
The bill was designed to tackle one of the biggest “financial ills” currently affecting military families: that of damaged credit scores, especially due to fraud or unexpected expenses.
To do this, the bill will provide free credit monitoring for all active-duty military and veterans, across all military branches. This will include fast notifications whenever any major changes are made to their credit file, as well as access to their full file immediately following the notification.
Before this bill was passed, the Free Credit Reporting Act of 2019 already provided limited monitoring services for active-duty troops and National Guard members. However, members who were temporarily off-duty, as well as military spouses and dependents, remained unprotected – even if they had also moved to a different base or station.
Who’s Behind the Initiative?
H.R. 1521 is a successful example of bipartisan cooperation. It was introduced and sponsored by four U.S. Senators: Amy Klobuchar (D-MN), who also wrote the bill, Kevin Cramer (R-ND), Tom Carper (D-DE), and Steve Daines (R-MT).
In addition, the bill is endorsed by The Military Coalition. When drafting the bill, the team enjoyed the support of many stakeholding companies, including TransUnion, Equifax, and Experian.
What Will This Bill Mean for Veterans and Military Families?
According to the Federal Trade Commission, active-duty troops and their immediate families are 76% more likely to be the victims of identity theft and other forms of credit card fraud.
This stems partly due to the rigors of the military lifestyle. Round-the-clock schedules and frequent moves make them easy targets. When you are frequently changing location, it’s easier to miss notifications or court dates. Banks may have a harder time identifying suspicious activities at the point of sale, as this is often done by examining the location. While deployed overseas, their everyday finances often fall on their spouses, who are not necessarily well-versed in credit management.
The result? Many military families end up with inaccurate credit reports. Then, they may spend years dealing with higher interest rates, being denied homes, or paying higher premiums for car insurance.
Currently, all major credit bureaus offer “credit monitoring” services, which help people identify quickly if anyone tries to take out a large loan on their behalf. But these services are often too costly for young families – Equifax charges $19.95 for credit monitoring, plus extra fees if you want to access a full report due to their alerts, while TransUnion charges $29.95.
Under the new legislation, members of the military and their immediate families will be able to sign up for a free monitoring service from any of those companies. Then, the credit bureaus will have to notify them within 48 hours whenever there are any changes to their credit file.
For Senator Klobuchar, the initiative is all about providing “peace of mind” to the people who allow our nation to live in peace.