An individual's ability to hold a security clearance is in part based on their credibility. Financial troubles are one of the many possible issues that can damage that credibility and lead to having security clearance revoked. As the article below demonstrates, it's imperative that any person seeking security clearance or actively maintaining one be on the lookout for different types of financial scams.
Loan sharks and shady academic institutions are scamming Soldiers and their families said the Army's top leaders.
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Secretary of the Army John McHugh and Army Chief of Staff Gen. Ray Odierno testified May 22, before the Senate Appropriations Committee, subcommittee on defense, about the Army fiscal year 2014 Budget.
Loan sharks and other predators are still preying on young Soldiers despite an annual percentage rate and fee cap of 36 percent for consumer credit transactions, a senator told the Army leaders.
He added that payday lenders and title loan companies proliferate around military installations.
It continues to be a problem, McHugh acknowledged.
"Every time a law is passed, we seem to be dealing with a new permutation," he said.
Over the last 12 years, Soldiers have had a "full plate" with training and other military duties, he said. "They understandably have other things on their mind."
The Army has provided financial briefings to Soldiers and their families through Army Community Services, he added.
Additionally, the Army has financial advisors at the battalion level, Odierno said. Although it's an additional duty for them, they are trained for it and are there to counsel Soldiers.
Odierno said he's had a lot of experience with predators who "grab young Soldiers very quickly, trying to take advantage of them with high percentage loans and other things."
The issue has been significant enough that he said he meets regularly with Holly Petraeus, who is working on behalf of Soldiers.
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Holly Petraeus is the director of the Consumer Financial Protection Bureau's Office of Servicemember Affairs.
"A bad credit report, a debt-collection action or other financial problem can be devastating to a service member's career and even affect the mission readiness of a military unit, which often cannot use a service member who has lost a security clearance due to financial problems," she said earlier this month during a visit with Soldiers in Korea.
As the drawdown in Afghanistan continues, Soldiers may become increasingly vulnerable to loan sharks and other predators.
Because of the frequent and long deployments over the last 12 years, Soldiers have gotten accustomed to having more money because of the benefits associated with that, Odierno said.
"As deployments go away, Soldiers will have to become acquainted with lower salaries," and the frequency of financial difficulties might actually rise, he said.
A large number of shady start-up universities are luring Soldiers, said a senator. They're providing very little in terms of education and their main goal is to get the money that comes with Soldier education benefits.
This has been an ongoing problem, Odierno replied, but the Army has been working hard at fixing this by requiring higher institutes of learning sign a memorandum of understanding, he said.
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As of March 1, 2013, Soldiers could no longer receive tuition assistance if their college or university has not signed the Defense Department's "Voluntary Education Partnership" Memorandum of Understanding, or MOU.
Among other things, the MOU requires the institution to adopt policies banning inducements for enrollment and refraining from high-pressure recruitment tactics to eliminate aggressive marketing to Soldiers.
However, the MOU didn't completely make the problems associated with universities and colleges go away, Odierno conceded.
"Many education institutions are still trying to maximize the profits they get from tuition assistance, so they're diving up the cost, making it almost unaffordable for us," he said.
"We want young men and women to improve themselves, but we've got to get cost under control," he added.
Some of the predation has come from online start-up education institutions, according to McHugh.
Historically, online courses have been very convenient for Soldiers, who are often forward deployed, he said. Over time, many good and not-so-good institutions emerged.
Now the Army is weeding out the not-so-good ones through the MOU process. However, Soldiers can still use their G.I. Bill benefits, which are not covered by the MOU.
McHugh said he suspects there will always be predators of one sort or another.
"In the end, people who are trying to take advantage of other people adapt very quickly," McHugh said.
The hearing produced a variety of other Army-related topics.
Regarding the Distributed Common Ground System, Army or DCGS-A, Odierno affirmed that it is an "essential part of our intelligence network" and that it is pushing out large amounts of intelligence information to those who need it in a timely fashion.
While bandwidth for DCGS-A is not yet what he'd like it to be, Odierno said the future looks bright as military networks eventually move to cloud computing.
As to sexual assaults, Odierno and McHugh said the Army is not yet where they'd like it to be in terms of eliminating the fear associated with reporting an attack and what actually occurs once a report is made.
Also, the Army is conducting climate surveys and sensing sessions in an attempt to gauge the comfort levels of Soldiers seeking to come forward to report any problems.
McHugh said he will sign a directive mandating background checks and require behavioral health screenings for those working in the Sexual Harassment/Assault Response and Prevention program.
That program, for victims of sexual assault, came under congressional scrutiny after a service member came under investigation earlier this month for alleged sexual assault.
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