Some lawmakers want more information on a Defense Department policy change that has limited the types of allotments troops can set up.
Members of the House Armed Services Committee's military personnel panel expressed their concern about the method defense officials used to prohibit certain allotments.
In their initial markup of the personnel portion of the fiscal 2016 defense authorization bill, the lawmakers are calling for extensive information from DoD on the reasons for the new policy, which took effect Jan. 1.
The report would be due next Jan. 1, if the full House agrees to it. The full committee is scheduled to take up the entire bill Wednesday.
Active-duty troops no longer can set up allotments to purchase, lease or rent consumer items. That applies to all "tangible and movable" personal property, such as vehicles, boats, motorcycles, washers, dryers, furniture, laptops, tablets, TVs and cellphones.
Troops still may use credit to buy these items; they just can't use allotments. Like other consumers, they can set up direct payments from checking accounts or use other options.
Other allotments are not affected, such as those going to family members, savings accounts, charities and investments, and to pay insurance premiums, mortgages and rent. The policy change does not apply to military retirees or DoD civilian employees.
The change was an internal DoD process and did not require a change in law, one source noted, adding that lawmakers are "trying to get DoD to study whether what they did was a good idea."
Consumer advocates and regulators have documented abuses in which troops were enticed to buy items using allotments in deals that misrepresented the total cost of the item, a defense official said at the time of the policy change, which was announced in November.
The change came from recommendations following a review of the allotment system ordered by former Defense Secretary Chuck Hagel in June 2013. That was spurred by a Consumer Financial Protection Bureau enforcement action against two companies, alleging they required troops to pay by allotments without disclosing all fees charged by third-party processors.
An interagency team conducted the review, consisting of representatives from legal and financial divisions in DoD, as well as the Joint Staff. The CFPB, Federal Deposit Insurance Corp., Federal Reserve Board, Comptroller of the Currency and the National Credit Union Administration also participated.
Lawmakers now want information on whether there was a public notice and comment period beforehand, a summary of public comments received, justification for the change, and an analysis, along with case studies, of the connection between predatory lending and the allotment system, and all other information DoD used in formulating the change.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
