[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

LEGISLATIVE HEARING ON H.R. 4115, H.R. 4740, H.R. 3860, AND H.R. 5747

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HEARING

before the

SUBCOMMITTEE ON ECONOMIC OPPORTUNITY (EO)

of the

COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

THURSDAY, JUNE 21, 2012

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Serial No. 112-69

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Printed for the use of the Committee on Veterans' Affairs

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COMMITTEE ON VETERANS' AFFAIRS

JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana LINDA T. SANCHEZ, California
BILL FLORES, Texas BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio JERRY McNERNEY, California
JEFF DENHAM, California JOE DONNELLY, Indiana
JON RUNYAN, New Jersey TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
MARK E. AMODEI, Nevada
ROBERT L. TURNER, New York

Helen W. Tolar, Staff Director and Chief Counsel

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SUBCOMMITTEE ON ECONOMIC OPPORTUNITY (EO)

MARLIN A. STUTZMAN, Indiana, Chairman

GUS M. BILIRAKIS, Florida BRUCE L. BRALEY, Iowa, Ranking
BILL JOHNSON, Ohio LINDA T. SANCHEZ, California
TIM HUELSKAMP, Kansas TIMOTHY J. WALZ, Minnesota
MARK E. AMODEI, Nevada

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.

C O N T E N T S

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June 21, 2012

Page

Legislative Hearing On H.R. 4115, H.R. 4740, H.R. 3860, and H.R.
5747........................................................... 1

OPENING STATEMENTS

Chairman Marlin A. Stutzman...................................... 1
Prepared Statement of Chairman Stutzman...................... 22
Hon. Bruce L. Braley, Ranking Democratic Member.................. 1
Prepared Statement of B. Braley.............................. 22
Hon. Elijah Cummings (MD-7)...................................... 2
Prepared Statement of Hon. Cummings.......................... 22
Hon. John Garamendi (CA-10)...................................... 4
Prepared Statement of Hon. Garamendi......................... 23
Hon. Steve Stivers (OH-15)....................................... 6
Prepared Statement of Hon Stivers............................ 24

WITNESSES

Mr. Ryan M. Gallucci, Deputy Director, National Legislative
Service, Veterans of Foreign Wars of the United States......... 8
Prepared Statement of Mr. Gallucci........................... 25
Mr. Steve L. Gonzalez, Assistant Director, National Economic
Commission, The American Legion................................ 10
Prepared Statement of Mr. Gonzalez........................... 26
Major General Andrew ``Drew'' Davis, USMC (Ret.)................. 12
Prepared Statement of Mr. Davis.............................. 29
Mr. John S. Odom, Jr., Esq., Jones and Odom L.L.P................ 13
Prepared Statement of Mr. Odom............................... 33
Mr. Mike Frueh, Director, Loan Guaranty Service, Veterans
Benefits Administration, U.S. Department of Veterans Affairs -
Prepared Statement only........................................ 36
Accompanied by:

Mr. John Brizzi, Deputy Assistant General Counsel, U.S.
Department of Veterans Affairs
Mr. John K. Moran, Deputy Assistant Secretary for Operations &
Management, Veterans' Employment and Training Service, U.S.
Department of Labor - Prepared Statement only.................. 38
Accompanied by:

Ms. Gerri F. Fiala, Deputy Assistant Secretary, Employment
and Training Administration, U.S. Department of Labor
Mr. Frederick E. Vollrath, Principal Deputy Assistant Secretary
of Defense for Readiness and Force Management, U.S. Department
of Defense - Prepared Statement only........................... 39

STATEMENTS FOR THE RECORD

Mr. Thomas E. Perez, Assistant Attorney General, Civil Rights
Division, U.S. Department of Justice........................... 41

MATERIALS SUBMITTED FOR THE RECORD

The American Legion.............................................. 44
Veterans of Foreign Wars......................................... 44
Disabled American Veterans....................................... 45
Paralyzed Veterans of America.................................... 46
Military Officers Association of America......................... 46

MATERIALS SUBMITTED FOR THE RECORD (continued)

Democratic Staff Report on: Fighting On The Home Front: The
Growing Problem of Illegal Foreclosures Against U.S.
Servicemembers................................................. 47

LEGISLATIVE HEARING ON H.R. 4115, H.R. 4740, H.R. 3860, AND H.R. 5747

Thursday, June 21, 2012

U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Economic Opportunity,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:09 a.m., in
Room 334, Cannon House Office Building, Hon. Marlin A. Stutzman
[Chairman of the Subcommittee] presiding.
Present: Representatives Stutzman, Johnson, Braley, and
Walz.

OPENING STATEMENT OF CHAIRMAN MARLIN STUTZMAN

Mr. Stutzman. Good morning. I welcome each of you to the
Subcommittee on Economic Opportunity of the Veterans' Affairs
Committee.
Today we will take testimony on four bills, H.R. 3860, the
Help Veterans Return to Work Act, introduced by the Honorable
John Garamendi; H.R. 4115, the Hire at Home Act, introduced by
the Honorable Steve Stivers; H.R. 4740, the Fairness for
Military Homeowners Act of 2012, introduced by the Honorable
Duncan Hunter; and H.R. 5747, the Military Homes Protection
Act, introduced by the Honorable Elijah Cummings.
Welcome to each of you. And since we have a full set of
witnesses today and we have votes coming up, I think I will
just dispense with the full remarks and recognize the
distinguished Ranking Member for any remarks that he has at
this time.

[The prepared statement of Hon. Marlin Stutzman appears in
the Appendix]

OPENING STATEMENT OF HON. BRUCE L. BRALEY,
RANKING DEMOCRATIC MEMBER

Mr. Braley. Thank you, Mr. Chairman, for holding this
legislative hearing.
I want to welcome all my colleagues. We are delighted to
have you here and we appreciate your interest in the issues
that this Subcommittee deals with which is one of the most
important areas that we face as a country and how we help our
veterans who have done so much for us by doing more than just
slapping on the back and telling them good job. Maybe it is
time we all stood together and found out how we are going to
provide them with good-paying jobs. So we appreciate your being
here.
I know that the end of the second session is quickly
approaching, so I am glad we are taking this opportunity to
review important legislation that will be beneficial to
veterans.
The bills included in today's hearing seek to improve
employment opportunities for veterans and enhance protections
under the Servicemembers Civil Relief Act.
The four bills included in today's hearing will provide for
employment and training, help veterans return to work, help
veterans refinance their mortgages, and improve protections
against foreclosures for veterans.
I would also like to take the opportunity to congratulate
Representative Cummings for the inclusion of his bill, Military
Family Home Protection Act and the National Defense
Authorization Act of 2013. The bill has been passed by the
House of Representatives with 299 votes in support which is a
great example of bipartisan work on behalf of our veterans.
As you are aware, the Committee democratic staff and your
staff are working closely through that process.
I would also like to thank the Chairman of the Full
Committee and his staff for including this important
legislation at today's hearing. It is good to know that we can
work together in the spirit of bipartisanship to provide
housing protections to servicemembers, veterans, and their
families.
Mr. Chairman, since the end of the second session is fast
approaching, I hope we can make the most of our time. I know
that some other bills that I suggest we review include the
Veterans Work Study Opportunities Act, the Ensuring Quality for
Education Act, the Wounded Veteran Job Security Act, the Revamp
with Community Colleges Act, and the Military and Veterans
Education Protection Act as well as my own Veterans Job Corps
Act. So I look forward to working with you and all the Members
of the Subcommittee in making that happen.
And I yield back.

[The prepared statement of Hon. Bruce L. Braley appears in
the Appendix]

Mr. Stutzman. Thank you.
Our first panel is composed of the Members whose bills we
are reviewing today. We have with us Mr. Cummings, Mr.
Garamendi, and Mr. Stivers. Welcome.
And, Mr. Cummings, I believe you are the senior Member and
so we will start with you and then we will have Mr. Garamendi
and then Mr. Stivers. And you will each be recognized for five
minutes and your complete written testimony will be made part
of the record.
With that, Mr. Cummings.

OPENING STATEMENT OF HON. ELIJAH CUMMINGS

Mr. Cummings. Thank you very much, Chairman Stutzman and
Ranking Member Braley and Members of the Subcommittee, for
inviting me to testify here today on H.R. 5747, the Military
Family Home Protection Act.
For the past several years and particularly as Ranking
Member of the House Oversight Committee, it has been my number
one priority to help millions of American families who have
been trying to protect their homes against foreclosure during
the economic crisis that has gripped our Nation.
In my opinion, nobody is more deserving of our help than
our military servicemembers fighting overseas.
H.R. 5747 is a common-sense bill that would expand the
Servicemembers Civil Relief Act to protect more of our brave
men and women in uniform from losing their homes while they
protect our freedoms abroad.
This legislation is supported by The American Legion,
Veterans of Foreign Wars, Paralyzed Veterans of America,
Disabled American Veterans, and the Military Officers
Association of America, all of whom have written letters of
support. And I respectfully ask that these letters be included
in the record.
In addition, this legislation has already been passed by
the House, as Mr. Braley said, as an amendment to the National
Defense Authorization Act that I offered with Ranking Member
Filner and Ranking Member Smith of the Armed Services
Committee. It passed by an overwhelming bipartisan vote of 394
to 27 including the majority Members on this Committee.
Here is what the legislation would do. First, under current
law, some home foreclosure protections for servicemembers are
set to expire at the end of the year.
So, Mr. Braley, when you talk about urgency of the moment,
this is rather urgent.
My legislation would fix that by eliminating the sunset
provision and ensuring that foreclosure protections are
extended to 12 months. We need to act this year to make sure
those protections do not expire.
The legislation would also ensure that servicemembers
serving in contingency operations such as Iraq and Afghanistan
do not have to worry about losing their homes regardless of
when they were purchased.
In addition, it would extend foreclosure protections to
surviving spouses of servicemembers who are killed in the line
of duty as well as to veterans who are 100 percent disabled due
to service-connected injuries at the time of discharge.
Finally, the legislation would prohibit discrimination
against servicemembers and their families who are covered by
these protections and it would double penalties to deter future
violations.
I crafted this legislation after more than a year of
investigating cases in which military servicemembers and their
families sadly had suffered illegal foreclosures and inflated
fees.
For example, last July, I issued a staff report documenting
these abuses entitled Fighting on the Home Front, the Growing
Problem of Illegal Foreclosures Against U.S. Servicemembers. I
ask that this report be included in the record.
In addition, Senator Jay Rockefeller, the Chairman of the
Senate Commerce Committee joined me in co-hosting a
congressional forum on this topic with a number of officials
including Holly Petraeus, the Director of the Office of
Servicemember Affairs at the Consumer Financial Protection
Bureau, who appeared alongside servicemembers and others to
provide recommendations.
I also want to extend my thanks to Ranking Member Braley
who participated in that bicameral forum as an original co-
sponsor to my legislation and has been integral to our efforts
over the past year.
And I want to thank you again, Congressman.
The results of our investigation demonstrate the clear need
for these improvements to the SCRA. Nobody fighting abroad to
protect our country should also have to fight here at home just
to keep a home and a roof over the heads of their loved ones.
I want to thank again the Members of the Committee for
bringing this bill to this hearing and for supporting my
legislation. Even though it has passed the House as part of the
National Defense Bill, I ask that my colleagues on both sides
of the aisle to continue to work together to ensure that we
enact these reforms into law.
And I understand that DoD has some concerns and have some
amendments. We reviewed those amendments and I have no problem
with it. Of course, I leave it up to this Committee. You are
the experts and I would hope that we would not allow any, you
know, changes like that, concerns on DoD's part to stop this
legislation. I think that the aim is so very, very important
and very vital.
And I think you, Mr. Chairman, and you, Ranking Member,
made it very clear that our veterans deserve the very, very
best that we can give. And, again, we want to keep a roof over
their heads.
And with that, I yield back.

[The prepared statement of Hon. Elijah Cummings appears in
the Appendix]

Mr. Stutzman. Thank you.
Before the Chair recognizes Mr. Garamendi, is there any
objection from the Committee that the written testimony be made
part of the record as well as the testimony?
Mr. Cummings. Yeah. There was two documents that I also
mentioned during my testimony.
Mr. Stutzman. Okay. No objection. So ordered.

[The attached appears in the Appendix]

Mr. Stutzman. Mr. Garamendi, you are recognized for five
minutes.

OPENING STATEMENT OF HON. JOHN GARAMENDI

Mr. Garamendi. Thank you, Mr. Chairman, Ranking Member
Braley, and Members of the Committee. Thank you for the
opportunity to testify on behalf of my bill 3860, Help Veterans
Return to Work Act.
It is an honor to be before you today and I thank you for
your continuing work to assist our veterans.
I represent the 10th district of California, home to Travis
Air Force Base, the largest air mobility command in the air
force. And nearby in Marysville, California is Beale Air Force
Base which is the leader in intelligence, surveillance, and
reconnaissance, ISR, and major weapons systems including the
U2, MC-12s, and Global Hawk.
Together these two bases, Travis and Beale, employ nearly
16,000 servicemembers across the active-duty spectrum, national
guard, and reserves. Over 75,000 veterans live in my district
and the surrounding area.
My bill, Help the Veterans Return to Work Act, addresses a
major problem not only in northern California but throughout
the United States, the tragically high unemployment rate among
veterans.
Specifically my bill seeks to increase the reemployment
rate among veterans by amending the undue hardship provisions
under the Uniformed Services Employment and Reemployment Rights
Act.
Currently an employer is excused from reemploying a
returning veteran if the employer's circumstances have changed
in a way that it is now impossible or unreasonable to do so or
imposes an undue hardship.
This undue hardship provision is too lenient in allowing
employers to dismiss employed servicemembers. As a reflection
of this problem, the number of USERRA complaints and inquiries
reported to the Employer Support of Guard and Reserve, a
Department of Defense Agency, increased 164 percent between
2008 and 2010.
The Veterans Reemployment Act of 2012 amends the basic law
so that undue hardship protections apply only to small
businesses, eliminating the protections that the large
businesses currently have.
In May 2012, the Bureau of Labor Statistics' current
population survey reported the unemployment rate among all
veterans of all ages was 7.7 percent, slightly below the
national unemployment rate.
This dynamic is consistent with historic trends.
Traditionally veterans' unemployment rate has been lower than
for nonveterans. Still 7.7 percent among veterans is far too
high and represents work that we must do.
The unemployment rate among all veterans pales in
comparison to the unemployment rate among veterans in the 18 to
24 year age group which is an alarming 23 and a half percent,
eight percent over the national unemployment rate for that age
group which is 15 percent.
Pretty clear the young men and women returning from war,
those in the reserves and in the guard have a real serious
reemployment problem.
VetJobs, a premier employment service for veterans and a
witness before this Committee in February 2012, has estimated
that the unemployment rate among young veterans will increase
even more as DoD starts to furlough active-duty troops and as
many of the national guard and reserve brigades start to return
home from their theaters.
This unemployment gap must be closed. And as this body has
made the decision to send these brave men and women to war, it
is now our responsibility to ensure that they can return home
to a job that enables them to support themselves and their
families in the same manner as they did prior to deployment.
Amending the undue hardship protections under the current
law which my bill seeks to do will bring us one step closer to
fulfilling our obligation to our veterans.
Mr. Chairman, I thank you and the Committee Members. I look
forward to any questions you may have.

[The prepared statement of Hon. John Garamendi appears in
the Appendix]

Mr. Stutzman. Thank you.
Mr. Stivers, you are recognized for five minutes.

OPENING STATEMENT OF HON. STEVE STIVERS

Mr. Stivers. Thank you, Chairman Stutzman and Ranking
Member Braley, for holding this important hearing on several
pieces of legislation today, especially this piece of
legislation that aims to help returning veterans receive
employment, the Hire at Home Act.
I also want to thank my co-sponsor, my lead democratic co-
sponsor, Representative Tim Walz of Minnesota, for his hard
work on this issue and helping me tackle this important issue.
This bill is designed to improve the cooperation between
the military and state agencies to more closely align
specialized military training with state licensing and
certification requirements.
The bill came from an idea at a veterans' roundtable in my
district in Columbus, Ohio, and I am grateful to the group of
local young veterans, three of whom are attending the Ohio
State University and talked about the problems they had in
getting back to work when they came back from Iraq and
Afghanistan.
The number of soldiers returning from Iraq and Afghanistan
is huge and it makes this effort that much more important.
And you may know that the unemployment rate among post-9/11
veterans is 12.7 percent according to the Bureau of Labor
Statistics.
By allowing military training in a comparable field to
count towards certification in the private sector will get
veterans back to work more quickly and be able to help their
families.
Specifically the Hire at Home Act would apply to the
veterans seeking state certification or license to become a
state tested nurse assistant, EMT, certified nurse assistant,
registered nurse, or commercial truck driver.
This legislation simply ensures that the states consider a
servicemember's experience by allowing them to skip expensive
and time-consuming hurdles to employment.
For example, an army medic who administered medication to
wounded soldiers and was responsible for their lives on the
battlefield could not be certified as an emergency medical
technician in many of our local communities without redundant
schooling.
This bill would make the transition much easier and
alleviate the pressures of unemployment in our veterans'
communities. One of the best ways to honor the service of our
veterans is to give them an opportunity to do the same job at
home without the unnecessary burdens of additional redundant
training.
Our bill would accomplish this objective and we are willing
to work with anybody who has any amendments on the bill and
look forward to addressing any concerns anybody might have.
This is, I think, an important bill to help get our veterans
back to work.
Again, I appreciate the Chairman and the Ranking Member
holding this hearing and look forward to working with you
throughout the course of getting this bill passed.
Thank you, Mr. Chairman. I yield back.

[The prepared statement of Hon. Steve Stivers appears in
the Appendix]

Mr. Stutzman. Thank you.
And thank you to each of you for bringing these bills
forward. And I think they are timely and very sensitive to the
situation that so many of our veterans face today.
I do not have any questions for this panel at this time.
Mr. Braley, any questions or comments?
Mr. Braley. Well, Mr. Chairman, I just want to make a
comment.
At a time when the public perceives that we do not do much
here to work together, I just want to acknowledge that I
recently had the opportunity to travel to Iwo Jima with one of
Mr. Stivers' constituents who is a young marine corps veteran
attending Ohio State University and having some issues with
disability payments that he was working on.
And when I shared that with Mr. Stivers, he could not have
been more accommodating and we have been working together on
making sure this young man gets everything he deserves. And I
think that is one of the things that we often ignore when we
talk about what is happening in Washington.
I just wanted to thank him for his great advocacy on behalf
of that young man.
Mr. Stutzman. Mr. Walz.
Mr. Walz. No questions.
Mr. Stutzman. Okay. Seeing there are no further questions,
I thank each of the Members for their testimony. And at this
time, I will let you all move on and I thank you for being
here.
At this time, I ask the second panel to come forward. With
us today is Mr. Ryan Gallucci from the Veterans of Foreign
Wars; Mr. Steve Gonzalez representing The American Legion;
Major General Andrew Davis from the Reserve Officers
Association; and Mr. John Odom, Esquire, a former Air Force JAG
officer and one of the authors of the 2003 rewrite of the
Servicemembers Civil Relief Act, and now Mr. Odom is in private
practice.
And we thank each of you for being here and we look forward
to each of your testimony. You will each be recognized for five
minutes and your complete written testimony will be made part
of the record.
Is there any objection from the Committee?

[No response.]

Mr. Stutzman. No objection. So ordered.
We will start with Mr. Gallucci and we will move to my
right.
Mr. Gallucci, you are recognized for five minutes.

STATEMENTS OF RYAN M. GALLUCCI, DEPUTY DIRECTOR, NATIONAL
LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED
STATES; STEVE L. GONZALEZ, ASSISTANT DIRECTOR, NATIONAL
ECONOMIC COMMISSION, THE AMERICAN LEGION; ANDREW DAVIS,
EXECUTIVE DIRECTOR, THE RESERVE OFFICERS ASSOCIATION; JOHN S.
ODOM, JR., ESQ., JONES AND ODOM, L.L.P.

STATEMENT OF RYAN M. GALLUCCI

Mr. Gallucci. Thank you, Chairman Stutzman.
Chairman Stutzman, Ranking Member Braley, and Members of
the Subcommittee, on behalf of the more than two million
members of the VFW and our auxiliaries, I want to thank you for
the opportunity to testify on today's pending legislation.
With the end of the conflict in Iraq, withdrawal from
Afghanistan imminent and proposals to lean on national guard
and reserve personnel for future routine missions, the VFW
believes discussing how to protect our servicemembers and
veterans within the workforce must remain a national
imperative.
Despite continuing efforts within the Federal Government
and across private industry, recent unemployment numbers for
veterans of the current conflicts indicate that we are not
solving the problem. And the VFW is encouraged to see that this
Subcommittee continues to take the situation seriously and we
are honored to share our thoughts on today's bills.
The VFW understands the goal of the Help Veterans Return to
Work Act is to ensure that large businesses can no longer claim
undue hardship as a reason to shirk their USERRA obligations.
However, the VFW cannot support this bill which we believe
would make members of the national guard and reserve
unattractive employees to large companies.
This issue is truly a double-edge sword. The VFW wholly
supports strong legal protections for members of the guard and
reserve, but we understand that the relationship between our
reserve component and civilian employers must be equitable for
both parties.
We feel the current provisions through which large
businesses can claim undue hardship offer both the
servicemember and the employer reasonable due process in
resolving reemployment disputes.
If we put so many legal constrictions on hiring members of
the reserve component, our servicemembers will be perceived as
a legal liability to potential employers large and small.
A recent report from the Center for a New American Security
cited USERRA compliance as a key challenge for employers who
would consider hiring veterans.
To the VFW, this implies that the perception of USERRA
among employers may actually prevent servicemembers and
veterans from ever getting in the door.
In light of this bill and other concerns over USERRA, we
invite the Subcommittee to host a separate hearing or
roundtable discussion on USERRA in the 21st century to better
understand how this law should be implemented, how it should be
enforced, and how we can best serve the interests of our
reserve component servicemembers down the road.
The VFW fully supports the Hire at Home Act. Over the last
few years, we have heard growing concerns of veterans who
receive years of practical work experience cannot receive state
licenses without jumping through hoops when they return home.
The VFW understands that states have the right to license
professionals as they see fit within their borders. However,
the VFW believes that states also have an obligation to
evaluate military experience once a veteran leaves active duty.
The Hire at Home Act will ensure that states critically
evaluate military training when considering veterans for
licensure in four key fields where we have seen high veteran
unemployment.
The VFW and our partners in The American Legion
successfully pushed for a Senate companion bill with some minor
changes which we would like to see the Subcommittee also
consider in markup. The changes detailed in my written
statement outline how states would report licensing gaps to the
Department of Labor and how Labor would share this information
with the Pentagon to close such gaps.
The VFW believes this bill is a responsible first step in
ensuring veterans can transition seamlessly into careers that
the military has diligently prepared them for while preserving
each state's right to license professionals within their
borders.
Moving forward, this concept could prove helpful in closing
the licensing gap for other MOSs.
We thank Congressman Stivers for introducing this bill and
we encourage the Subcommittee to quickly pass legislation that
reflects the VFW's recommendations.
The VFW also supports the Fairness for Military Homeowners
Act and we believe it offers responsible financial relief to
military homeowners who are forced to frequently change duty
stations.
In the past, military homeowners could easily sell or rent
their properties whenever they needed to move. This all changed
when the housing bubble burst in 2008. This bill would offer
relief to military families by allowing military homeowners to
refinance the mortgage on homes at their duty stations as if
the home was still a primary residence, avoiding high interest
rates.
Congressman Hunter's bill is a common-sense approach that
will offer reasonable relief to military homeowners which is
why we encourage the Subcommittee to pass it.
The VFW also strongly supports the Military Family Home
Protection Act which seeks to end predatory foreclosures on
military families whose loved ones are deployed, permanent and
totally disabled, or who lost their loved ones in the line of
duty.
Over the last few years, we have heard horror stories about
companies foreclosing on military homeowners while
servicemembers are deployed. This bill seeks to end this
unconscionable practice by affording specific protections for
such families. This bill also strengthens penalties for persons
who knowingly violate certain provisions under the
Servicemembers Civil Relief Act.
Never again should a military family worry that the bank
will seize their home while their loved one is serving overseas
or after their loved one has made the ultimate sacrifice.
Military homeowners face unique circumstances that can
often lead to financial hardship which is why they deserve
these kind of reasonable accommodations.
We thank Congressman Cummings for introducing this bill and
hope the Committee will move quickly on it.
Mr. Chairman, this concludes my testimony. I would be happy
to answer any questions the Subcommittee may have.

[The prepared statement of Ryan M. Gallucci appears in the
Appendix]

Mr. Stutzman. Thank you.
Mr. Gonzalez, you are recognized for five minutes.

STATEMENT OF STEVE L. GONZALEZ

Mr. Gonzalez. Good morning, Mr. Chairman and Ranking Member
and Members of the Subcommittee. Thank you for this opportunity
to present The American Legion's view on several pieces of
legislation being considered by the Committee today.
The American Legion supports all four pieces of
legislation, but due to the allotted time available, I will
concentrate on two out of the four bills, H.R. 5747, Military
Family Home Protection Act, and H.R. 4115, the Hire at Home
Act.
H.R. 5747, Military Family Home Protection Act, while
servicemembers fight overseas, another war has been brewing
back home, foreclosures. Since the 2006 collapse of the real
estate market, tens of thousands of military servicemembers
have lost their homes to foreclosure. History has shown even
those putting their lives on the line for their country may not
be safe from foreclosure.
America simply cannot afford to have our men and women in
Iraq, Afghanistan, or elsewhere distracted by concerns over
whether someone is seeking a default judgment against them back
home or evicting their spouse and children or selling their
home at an auction sale.
H.R. 5747 would provide mortgage protection for members of
the armed service, surviving spouse, and some veterans. This
legislation would expand the statute covering servicemembers
that are part of a contingency operation, that is anyone who is
or could become involved in military actions, are called up to
or retained in active-duty service.
In the past, military servicemembers and their families
have been foreclosed upon illegally. Whether or not this has
been due to carelessness or callousness, neither is acceptable.
H.R. 5747 seeks to strengthen the law to ensure that
America's servicemembers have ample time to handle financial
matters.
The American Legion applauds Representative Cummings for
his leadership and efforts to tackle and address this issue.
Next I am going to go to H.R. 4115, the Hire at Home Act.
In early 1996, The American Legion launched the first
groundbreaking credentialing report to study those vocational
skills which the armed services provide training and for which
a license or certificate is required to work in their
respective field in the civilian sector.
Although these outstanding servicemembers possess excellent
skills, in many cases easily transferrable to civilian careers,
however, the lack of official recognition of their training has
hampered a smooth transition from active-duty military service
to meaningful civilian employment.
Honorable military servicemembers should advance patriots'
vocation opportunities rather than stymie their employability.
These servicemembers and veterans have attended some of the
finest technical and professional training schools in the
world. They are graduates with experience in health care,
electronics, computers, engineering, air traffic control,
nuclear power plant operations, so on and so forth.
Many of these skills require some type of license or
certificate to find a career in the civilian workforce. In all
too many cases, this license or certificate requires schooling
which has already been completed by attendance at an armed
services training institution. Unfortunately, the agencies
which issue the license or certificate do not recognize the
training or experience already completed.
As an example, a medic who treated gunshot wounds in
Operation Enduring Freedom is qualified as a medic, but would
not be certified as an emergency medical technician in our
Nation's cities without additional redundant schooling.
This is more evident as demand for qualified workers in a
diverse range of occupation areas continue to grow and
employers face challenges to fill these occupations because of
a shortage in the skilled workforce. Employers must begin to
seek elsewhere to obtain the high-level skills they need to
fill in their ranks.
Servicemembers and veterans are a highly trained, skilled,
disciplined, and dedicated group of men and women, moreover
represent a unique labor pool that can contribute significantly
to the Nation to maintain its competitive edge in the global
economy.
Servicemembers and veterans receive basic skills and
training during their military service. Though the veteran's
career is intended for the defense of America, however, a large
portion of this training has relevant and direct application to
the civilian labor workforce upon transitioning from military
service.
The American Legion applauds Representatives Steve Stivers
and Tim Walz for their leadership and efforts to tackle and
address this issue.
This Committee should also be aware of additional
legislation as well as other actions Members of Congress have
undertaken which will help this problem. They are as follows.
Representative Denham from California and once again
Representative Walz have also introduced H.R. 4155, the Veteran
Skills Work Act, which would streamline the credentialing
efforts on the Federal level.
The American Legion thanks the Committee for allowing us to
testify and if you have any questions, be more than happy to
answer any questions.

[The prepared statement of Steve L. Gonzalez appears in the
Appendix]

Mr. Stutzman. Thank you.
Major General Davis, you are recognized for five minutes.

STATEMENT OF MG ANDREW DAVIS

Major General Davis. Good morning. Chairman Stutzman,
Ranking Member Braley, and Members of the Committee, I am Major
General Drew Davis, Executive Director of the Reserve Officers
Association, and I would like to thank you for the opportunity
to testify this morning.
I have also been given permission by the Reserve Enlisted
Association to testify on their behalf.
The consequences of mobilization and demobilization do not
solely impact on our military members. It also has an effect on
their families and their employers. Families and employers play
a large role in a citizen warrior's decision on whether or not
to enlist or to reenlist in the reserve force.
In personnel surveys, employer pressure is listed as one of
the top two reasons why reservists and guardsmen choose to quit
military service. Remember that after their initial enlistment,
they serve voluntarily. That is why it is paramount that we
work to improve the employability of members of the reserve and
guard as well as all veterans.
Unemployment in the 18 to 24-year-old cohort remains high.
This group principally represents the first tour veterans
returning from active duty or their initial reserve
mobilization. It is my belief that despite USERRA protections,
we are seeing stealth discrimination in first-time hiring
because of reserve affiliation as demonstrated by about a
reported eight percent higher unemployment rate for reservists
than for nonaffiliated veterans.
I fear the unemployment rate is higher because employers
are shying away from hiring potential employees who can be
expected to be recalled to active duty one year out of every
five as we executive our national defense strategy that retains
an operational and strategic reserve force.
That employment discrimination can be subtle and not overt.
The prospective employer sees the applicant's reserve
affiliation and says thanks so much for your service, yet after
the interview, the application and the resume end up in the
round file.
The employer, particularly of the small business or
municipality, knows that he will have to cover a one year in
five absence.
H.R. 3860, the Help Veterans Return to Work Act, would help
with reemployment. If enacted, it would tighten up USERRA by
permitting only small business concerns to claim hardship if
unable to rehire a reserve component member.
H.R. 4115, the Hire at Home Act, codifies the need to
credit any such military training as one of the program
functions of the assistant secretary of Labor for Veterans'
Employment and Training.
Additionally, ROA and REA encourage the implementation of
any means that would credit veteran employees' experience
gained through their military service.
Stresses at home are the second leading factor causing
reserve and guard members to drop from the ranks after their
return from deployment. Financial problems are a top conflict,
creating stress in military families.
Mortgage protection under the Servicemembers Civil Relief
Act helps reduce this stress.
H.R. 4740, Fairness for Military Homeowners Act of 2012,
protects serving members from being denied refinancing should
they no longer reside in their premises because of relocation
caused by a permanent change of station or a deployment of 18
months or longer.
As a number of selected reservists are also full-time
members of the active reserve or active guard, ROA and REA
support this bill.
H.R. 5747, the Military Family Home Protection Act, while
noble in intent, has some inconsistencies in how it defines
mobilization. The mortgages of servicemembers deploying out of
the continental United States are protected, while those
serving on CONUS duty are not.
A message that ROA and REA always take to Capitol Hill is
the need for parity as often the reserve and guard do the
mission without receiving the same benefits.
As stated in our written testimony, ROA and REA can endorse
the intent of H.R. 5747, but feel that if mortgage protections
are going to be expanded under SCRA, the language needs to be
revised to not inadvertently exclude a group that should be
included.
ROA is willing to work with the Committee on this
legislation.
Reserve Officers Association established the Servicemembers
Law Center with retired navy captain Sam Wright as director.
This service is provided to all members of the uniformed
services. Captain Wright receives on average 500 calls a month
and 800 last month from veterans facing legal problems on
USERRA and SCRA issues.
ROA would like to share our garnered knowledge with the
Committee as we see trends and problems facing our serving
members. Leading the list are USERRA enforcement issues
followed by problems with financial institutions and health
care access.
ROA would like to thank the Committee and its staff for its
attention to this critical issue, which has become increasingly
more important and a concern for both veterans and their
families.
We look forward to continuing to work with the Committee
and staff.

[The prepared statement of MG Andrew ``Drew'' Davis appears
in the Appendix]

Mr. Stutzman. Thank you.
Mr. Odom, you are recognized for five minutes.

STATEMENT OF JOHN S. ODOM, JR.

Mr. Odom. Thank you.
Chairman Stutzman and Ranking Member Braley and Members of
the Subcommittee, I am John Odom. I am an attorney at law from
Shreveport, Louisiana.
I have listened to the other panel members and let me just
tell you I am the guy that comes along and sues the banks when
they do not follow the act. So this is what I do for a living.
This is my area of practice.
The vast majority of my practice is representing veterans
and current servicemembers against individuals and banks and
credit institutions that have violated their rights under the
SCRA.
I was lead counsel for Sergeant James Hurley in the big
suit against Deutsche Bank and Saxon Mortgage Services in
Michigan that led to Congress actually reenacting a new
provision or enacting a new provision to clarify that there is
a private cause of action to sue people who violate their
rights.
So I teach at all three of the service judge advocate
schools. I have authored books on this. I have written
extensively on it. So I come to you with a practical viewpoint
of the two bills on which I am testifying this morning.
H.R. 4740, first of all, I fully support the concept that a
servicemember should be able to refinance a home during a
period of active duty even though they may not be residing in
the residence as a result of military orders.
I understand from legal assistance attorneys who call me
dozens of times a month from around the world that certain
mortgage companies take the policy position that a mortgagor
may only refinance the home if they are currently residing in
the home.
Obviously if the absence from the home is as a result of
military orders, whether it is a mobilized guardsman or
reservist who is stationed away from his primary residence or
if it is a permanent party or an active-duty member who is
stationed away from her home because she got PCS orders and had
to move before she could sell the house, it is manifestly
unfair to not allow servicemembers to refinance their homes.
However, the Servicemembers Civil Relief Act protects pre-
service mortgages from nonjudicial foreclosure in Section 303
of the act. Under 4740 as drafted, a refinancing of a mortgage
while a servicemember is on active duty would cause the
servicemember to lose the protections of Section 303 because
the new mortgage would no longer be a pre-service obligation.
I do not think you wanted to do that. I suggested
additional language could be added to 4740 to provide that any
refinancing accomplished pursuant to the section would not
alter the status of the mortgage as a pre-service mortgage.
Again, this is what happens when you trigger the dreaded law of
unintended consequences.
As a final comment on 4740, I also question why the
proposed amendment requires that a deployment be for a period
of not less than 18 months. The period of deployment
concurrently provided for lease cancellations under Section
305, for example, is not less than 90 days.
I know that a lot of our guard and reserve units do not
deploy for 18 months, so why would you want to give the
protection only to those people for whom I do not think we are
going to be seeing deployment orders for that length of time?
So I suggest that you might want to look at that.
Turning to 5747, while the goals are truly laudable, it
presents a significant expansion of the SCRA and I think you
need to evaluate it very closely for two primary reasons.
First, with regard to foreclosures, the amendment simply
cannot be realistically implemented as it is drafted and,
secondly, it does not fully accomplish what I think Mr.
Cummings meant to do with his bill.
I agree completely with Mr. Cummings and the bill's co-
sponsors that the home of any servicemember who is deployed
should simply never be subject to foreclosure. Judicial or
nonjudicial, regardless of when the mortgage was incurred,
before service or during service, there are simply too many
factors that cannot be anticipated when a servicemember deploys
and communication is too difficult from war zones for banks and
mortgage companies to be seizing and selling servicemembers'
homes while they are off in harm's way.
While we agree on that fundamental position, I am equally
concerned that this Congress not change Section 303 which
places the onus on creditors to ascertain the military status
of an individual before they begin a nonjudicial foreclosure
action.
Under the current Section 303, the servicemember does not
have to give any notice to the creditor. The best way to
accomplish the proposed expansion of mortgage foreclosure
protections contemplated by 5747 would be to insert a
completely new Section 303A into the act.
If you want to protect deployed individuals, regardless of
whether they live in a nonjudicial foreclosure state which is
27 of our states or a judicial foreclosure state which is 23 of
our states, and if you want to protect them from both judicial
foreclosure, nonjudicial foreclosure, and foreclosures on both
pre-service and during service mortgages, do it, but write it
in a separate section that is clearly titled as such.
If you want to expand the protections to wounded warriors
and to surviving spouses, that is a policy decision that the
Congress will have to make and that is certainly a good goal.
But there is no searchable database now in which a proposing
mortgage foreclosure creditor could ascertain whether someone
is a surviving spouse or whether someone is a wounded warrior.
I find it really ironic that I am sort of taking the side
of industry, but fair is fair here. If you enact this bill as
written, it is unfair. It is unfair to the banks and although I
make a lot of money off of certain banks, I have to tell you I
do not think this one is practical.
I think it could be changed if you either amended 5747 or
did an entirely new act. My written remarks, I have drafted a
proposed Section 303A that I think would work, but as drafted,
I cannot support 5747 and suggest to you that you are making
compliance unreasonably complicated for the banks in that
regard.
As for the remaining protections in 5747, I wholeheartedly
endorse and recommend approval. You need to eliminate the
sunset provision on the extension of nonjudicial mortgage
foreclosures. The addition of a prohibition against credit
discrimination for persons who may become protected by the act,
that is a great idea. And the requirement for SCRA compliance
officers, all of those are good ideas.
I would only caution the Subcommittee about this and I will
quit. Just because a person may be designated as an SCRA
compliance officer at a large bank does not mean that he or she
has the foggiest idea of what the SCRA is or how it is supposed
to be implemented.
I would urge if you enact that portion to have appropriate
oversight for any compliance efforts imposed on the financial
services industry because in my past experience, to put it
charitably, many of them know not of what they speak.
Thank you for your time. I am happy to work with Committee
or staff on any amendments and I am open to any questions.
Thank you, sir.

[The prepared statement of John S. Odom appears in the
Appendix]

Mr. Stutzman. Thank you.
It sounds like if you run out of any lawsuits, you have the
ability to do a lot of consulting to the banking industry if
need be. But thank you for your testimony.
I just want to make this comment. They have called the
votes at eleven o'clock and I would like to get everybody's
testimony in, but we do want to make sure we have time for
questions because we are going to be going until--votes will be
going until about 1:30 and I know folks have flights to catch.
So I would like to try to adjourn by the time we are done.
So I have got two questions and the first one is for Mr.
Gallucci. Can you go into detail on the potential impact of
H.R. 3860? What kind of impact could that have on
servicemembers' ability to be employed by large employers?
Mr. Gallucci. Absolutely. I am glad you asked that
question, Chairman.
The concern that we have really has to do with the
veteran's ability to get through the door. When you look at the
unemployment statistics for veterans even in the age group 18
to 24, it is our belief that we are not necessarily talking
about veterans who are asking for reemployment. These are
veterans who are looking for first-time employment.
And what we saw in the report from the Center for a New
American Security was that one of the top concerns for
potential employers when considering hiring a servicemember or
a reserve component servicemember or a veteran was the
perpetual threat of a military obligation.
Now, one of our concerns beyond this, beyond reserve
component servicemembers is that within the civilian military
disconnect, there is a general misunderstanding of the
difference between a reserve component servicemember and a
veteran.
Myself, I have been asked on job interviews when discussing
my military service whether or not I would have to go back. I
left the military in 2007. That is absolutely not a concern
that I would be recalled to active duty.
So our concern is that when we are talking about these
daunting unemployment figures for Iraq and Afghanistan veterans
that we run the risk of making them even more unattractive to
large employers if we do away with the due process through
which an employer could demonstrate that there may have been a
hardship, there may have been a reduction in force, and it may
be necessary to let a certain employee go.
Now, what we do support is stronger enforcement of USERRA
policy. This is where we see the major gap, when state
attorneys general are only prosecuting eight percent of the
USERRA complaints that come through their offices, when we hear
from Department of Labor that they are running up against major
defenses from the legal teams of these major corporations. That
is not necessarily because of the undue hardship clause. That
will continue. They will continue to fight for why they do not
need to live up to their USERRA obligation. So we are concerned
that this on the front end would impact veterans in their
ability to land a job to begin with.
Mr. Stutzman. Thank you.
Mr. Braley.
Mr. Braley. Mr. Gallucci, I just want to follow-up briefly
on that last comment because when we did field hearings last
summer, it was obvious that a lot of the larger employers
because they have more sophisticated human resources department
have a greater understanding of how MOS qualifications can
translate into civilian work requirements.
And we talked about the fact that those larger employers,
many of whom hire a large number of veterans, can do a lot to
help educate medium and small size employers understand how to
make that Rosetta Stone translation which is a big mystery to
many of them.
But the other side of that sword is that they also have a
lot more sophistication in how to use a doctrine of reduction
in force to justify almost any termination of employment.
And so I think when we talk about the benefits of wanting
to make sure that those employers have incentives to hire
unemployed veterans, also have to realize that they have much
more sophisticated practices sometimes as saying, as General
Davis said, a stealth discrimination in how you resolve a back-
end resolution of somebody's employment status. So I appreciate
your comments.
And one of the things you talked about, Mr. Odom, was this
concern about Section 303 and the ability of creditors to
ascertain military status of mortgagers prior to nonjudicial
foreclosures.
When J.P. Morgan testified recently about their practices,
they talked about using the Defense Manpower Data Center as a
way of trying to address that concern.
What experience do you have with that data center and what
problems or solutions need to be addressed before it can truly
be a searchable database that addresses the concerns that you
raised?
Mr. Odom. Thank you, sir.
I do not think you need to change the DMDC database at all.
It is one of the most effective and efficient departments of
any executive agency of the government. It is amazing what
those people can do.
But you would actually be asking their computer system to
talk to the VA's computer system because those are the folks
that declare the wounded warriors and issued those hundred
percent disability letters. Those systems do not talk to one
another.
And then I actually think on the surviving spouse thing, I
want you all to consider there might be a force protection
issue here. I mean, a surviving spouse may not go into default
and a surviving spouse may not want his or her name in a
searchable database.
If I was the surviving spouse of a member who had been
killed in a particularly sensitive military operation, I would
not want my name in a database. And I think we have to remember
that.
Mr. Braley. Sure.
Mr. Odom. But the database is not the big issue. The big
issue can be completely solved. If you want to expand it into
these three additional categories of people who now are not in
a searchable database, simply establish in a separate section a
requirement that those people give notice to J.P. Morgan or
Citi or Wells or whoever. It is a simple notice.
Okay. Now I am in a newly protected category and I demand
protection for the 12 months that I am entitled to it. That is
a completely different thing, sir, than saying that we are
going to put that in 303.
With all due respect, and, again, I sue banks, this is what
I do, they cannot get 303 straight now. If you make it
infinitely more complicated, well, I will just have more
business. But we need to be thinking about how we can protect
the people instead of whether I can make money for them on the
back end.
Once you have lost your home, it is gone.
Mr. Braley. Sure.
Mr. Odom. And that is a terrible thing for these folks that
they come home and their home is gone. And it is years to
straighten these messes out.
So my recommendation, sir, is that you not change the DMDC
database. It is working quite well for what it is intended for.
If you want to expand, do it in a separate section, denominate
it as such, and make those additionally protected people who
want this protection give written notice to the creditor. That
seems fair to me.
Thank you, sir.
Mr. Braley. You are welcome.
Just before I wrap up, one of the things that Mr. Gallucci
raised was the whole issue of licensure and how that impacts
people's attempt to get unemployment when they have already
gone through extensive training.
I am curious what your organizations, General Davis, Mr.
Gonzalez, Mr. Gallucci, have done with state legislators
because it seems to me that we have seen a solution in some
ways where when you have got these licensing codes and there
are specific requirements of education, training, and work
experience to get a license that you include language, kind of
catch-all language to the end of those descriptions that says
or other equivalent education, training, and work experience.
Have you had any experience in trying to get the
legislators to move to make it easier for military occupation
specialties to translate into civilian employment?
Mr. Gonzalez. Mr. Braley, speaking on behalf of The
American Legion, we have taken a couple of different
initiatives to address this issue.
One has been on June 12th, we had a meeting with
credentialing boards at The American Legion with the army
training and doctrine to start looking at and reevaluating some
of the actual programs of instruction and how high-demand jobs,
of course, we selected eight different MOSs or military
occupations within the army to look at the program of
instruction, how they are training the individual soldiers at
the what they call schoolhouses of training venues and
locations to start actually having the credentialing body who,
first of all, does not require state nor Federal legislation to
have these particular industries to start certifying and
credentialing the servicemembers which, of course, to
transition into not just employable jobs but also with jobs
that actually contribute back to the economy where the
servicemember is not employed and not taken away from the
economy per se.
So that is one avenue that The American Legion has taken.
The other one has been working very closely with Congressman
Walz's office as well as Congressman Denham's office from
California who also sits on not this Committee but the overall
Committee on addressing the Federal issue.
As it currently stands, you have 82 licensures that are
issued by the Federal Government, so FAA, FCC, Homeland
Security issue specific licenses within their respective
civilian counterpart jobs.
This particular legislation should it pass, it will require
that the Federal Government per se have the authority to look
at, and when I say relevant, it is more of even though you are
not trained in a particular, say, the front end in the
schoolhouse, what ends up happening is through your time in the
military, you will end up gaining some other experiences that
could be documented.
And once it is documented and you transition out of the
service, that documentation can be presented to these
authorities that can evaluate and also by evaluation take that
particular evaluation and marry it up with what they have in
their particular system and how they train the civilian
counterparts to issue a license where in return, you actually--
I mean, last year, the DoD spent roughly almost a billion
dollars in unemployment benefits. I mean, you have the DoD
spending hundreds of thousands of dollars to training
servicemembers only to come out and the servicemember has to go
and get retrained again, spending additional taxpayers'
dollars.
In this economic environment, I am pretty sure we can
minimize that usage of taxpayers' dollars and actually have the
servicemember be contributing back to the economy and
strengthening America's economy.
So these are some of the things that The American Legion
has taken up, not just legislation, but also--and as far as the
state level goes, we are in contact with the National Governors
Association, so we can work with State Government Association
to hopefully present state legislation that will also address
some of these issues. And this is pretty much the next step
that The American Legion has taken.
Mr. Braley. Thank you very much.
Mr. Gonzalez. Thank you, sir.
Mr. Stutzman. Thank you.
Mr. Walz.
Mr. Walz. I am good.
Mr. Stutzman. Good?
I have got just one quick follow-up question to Mr. Odom.
Could you discuss the difficulties that banks would have
ascertaining if the homeowner is deployed, if they are
medically retired or have a hundred percent VA rating or a
surviving spouse, how difficult is that for the banking
industry?
Mr. Odom. Right now they cannot. I mean, there is no
searchable database whereby they, the banks, would be able to
ascertain that. It simply cannot be done. That is the reason
why it--my suggestion, sir, is if you want to provide these
protections for these expanded groups, then it only seems to me
to be fair to put the burden on these newly protected people to
give notice to the financial institution when they claim credit
for--when they claim protection as this newly expanded
classification because there is no way for the banks to comply.
They can search every known database known to mankind now
and they would never find out that someone has a 100 percent
disability rating. They would never find out that she or he is
a surviving spouse of a service-connected death. It cannot
happen.
That is the big problem that I have with 5747. It is a
great idea, but you cannot implement it as it is now. My
experience as a litigator is if a judge or a jury sees a
defendant who is being sued for noncompliance with something
that they could not comply with, you are not going to win. You
are just not going to get any damages for these people. So
there I go talking about lawsuits again, but it is what I do,
Mr. Chairman.
But I am simply suggesting that I do not think, and I do
not speak for the DMDC, I know those people, they are
unbelievably technically capable, but these are databases that
they do not have, and I do not think they can create and I do
not think you want some of these names in that database.
But be that as it may, I think you can change all of that
and you can rectify the problem. If you expand it to these new
areas, require those newly protected people to claim their
rights by written notice and then you are going to get into the
problem of, well, who do I give that notice to.
I send my payment to a payment center in Flagstaff, Arizona
and my mortgage is part of a tranche that has $200 million
worth that is held by Deutsche Bank in some offshore bank. I
mean, you know, good grief. Who do you give the notice to
because let me just predict that when somebody gives that
notice and after the foreclosure takes place and I sue them,
they are going to say we never got the notice. Gee whiz.
You know, you cannot communicate with these folks. They are
too big. And I do not mean to be hard on the financial services
industry. I know they are trying and probably, you know, there
are millions of mortgages out there and they do a good job on a
lot of them. The only ones I see, however, are the horror
stories where somebody has spent every minute of his or her 30
minutes a week telephone time on hold with some customer
service center in no name nowhere arguing with somebody who has
never seen this act about whether or not they can or cannot
proceed to foreclose on their home.
We are able to stop a lot of them. Some of them we have
not. But that is my problem, Mr. Chairman. 5747 puts an
unworkable burden out there with no real solution that I can
see.
Mr. Stutzman. Okay. Thank you, sir.
Mr. Braley, I think we are probably going to run out of
time and instead of going to the third panel, I will just have
the third panel submit their testimony for the record.
Do you have any further questions for this panel?
Mr. Braley. No.
Mr. Stutzman. Okay. Well, thank you very much each of you
for being here. We definitely appreciate your input and asked
for your input.
Mr. Odom, you have got a lot of experience with this and so
any suggestions are welcome and we could definitely keep that
under consideration because I think it is important that we do
get this right. We want to make sure that we do not create
another problem in lieu of trying to find the solution.
So with that, thank you for your testimony and you all are
dismissed.
Actually, I will just close the hearing if there are no
further questions. I thank each of you for being here.
Yes. I would like to just recognize the third panel which
was going to testify. Let's see. Let me make sure I get the
right notes.
Actually, our last panel would have been Mr. Mike Frueh, I
believe. Is that how----
Mr. Frueh. Frueh.
Mr. Stutzman. Frueh from the VA and he is accompanied by
Mr. John Brizzi.
And, Mr. Brizzi, I was told that your family and your son
has been dealing with some issues. I want to wish you the best
and keep them in our thoughts and prayers. All of us have
family and we all know the difficulties that we all have. Mr.
Brizzi, thank you, and wish you all the best and hope all goes
well.
Also, we had Mr. Frederick Vollrath from the Department of
Defense. Representing the Department of Labor's Veterans'
Employment and Training Service is Mr. John Moran and he is
accompanied by Ms. Gerri Fiala.
So thank you for being here, and I apologize for the
situation with votes, but we do have your testimony. And,
again, always look for information from all interested parties
with that. So thank each of the witnesses for being here today.
Without objection, Members have five legislative days in
which to revise and extend their remarks. Hearing no objection,
so ordered.
This hearing is adjourned.

[The prepared statement of Mike Frueh appears in the
Appendix]

[The prepared statement of John K. Moran appears in the
Appendix]

[The prepared statement of Frederick E. Vollrath appears in
the Appendix]

[The prepared statement of Thomas E. Perez appears in the
Appendix]

[Whereupon, at 11:08 a.m., the Subcommittee was adjourned.]

A P P E N D I X

----------

Prepared Statement of Hon. Marlin Stutzman, Chairman
Good morning. Today, we will take testimony on four bills; H.R.
3860, The Help Veterans Return to Work Act, introduced by the Honorable
John Garamendi, H.R. 4115, the HIRE at Home Act, Introduced by the
Honorable Steve Stivers, H.R. 4740, the Fairness for Military
Homeowners Act of 2012, introduced by the Honorable Duncan Hunter, and
H.R. 5747, the Military Homes Protection Act, introduced by the
Honorable Elijah Cummings.

Prepared Statement of Hon. Bruce L. Braley,
Ranking Democratic Member

Thank you, Mr. Chairman, for holding this legislative hearing
today.
I know that the end of the second session is quickly approaching,
so I am glad that we are taking this opportunity to review important
legislation that will be beneficial to veterans.
The bills included in today's hearing seek to improve employment
opportunities for veterans and enhance protections under the
Servicemembers Civil Relief Act. The four bills included in today's
hearing will provide for employment and training, help veterans return
to work, help veterans refinance their mortgage, and improve
protections against foreclosures for veterans.
I would also like to take this opportunity to congratulate Rep.
Cummings for the inclusion of his bill, H.R. 5747, the Military Family
Home Protection Act in the National Defense Authorization Act of 2013.
This bill has been passed by the House of Representatives with 299
votes in support.
As you are aware the Committee Democratic staff and your staff
worked closely through that process. I also would like to thank the
Chairman of the Full Committee and his staff for including this
important legislation in today's hearing. It's good to know we can work
together in the spirit of bipartisanship to provide housing protections
to servicemembers, veterans, and their families.
Mr. Chairman since the end of the second session is fast
approaching, I hope we can make the most of our time. Some other bills
that I suggest we review include the Veterans Work Study Opportunities
Act, The Ensuring Quality for Education Act, the Wounded Veteran Job
Security Act, the REVAMP with Community Colleges Act, and the Military
and Veterans Education Protection Act, as well as my Veterans' Job
Corps Act.
I do not expect us to agree on all bills but I would respectively
recommend, Mr. Chairman, that we take the opportunity to review more
bills at each of our legislative hearings. This in turn would give us
more choices for legislative markups.
Thank you Mr. Chairman and I yield back.

Prepared Statement of Hon. Elijah E. Cummings,
Ranking Member, Committee on Oversight and Government Reform

Thank you Chairman Stutzman, Ranking Member Braley, and Members of
the Subcommittee for inviting me to testify today on H.R. 5747, the
Military Family Home Protection Act.
For the past several years, and particularly as Ranking Member of
the House Oversight Committee, it has been my number one priority to
help millions of American families who have been trying to protect
their homes against foreclosure during the economic crisis that has
gripped our nation. In my opinion, nobody is more deserving of our help
than our military servicemembers fighting overseas.
H.R. 5747 is a common-sense bill that would expand the
Servicemembers Civil Relief Act (SCRA) to protect more of our brave men
and women in uniform from losing their homes while they protect our
freedoms abroad.
This legislation is supported by the American Legion, Veterans of
Foreign Wars, Paralyzed Veterans of America, Disabled American
Veterans, and the Military Officers Association of America, all of whom
have written letters of support. I respectfully ask that these letters
be included in the record.
In addition, this legislation has already been passed by the House
as an amendment to the National Defense Authorization Act (NDAA) that I
offered with Ranking Member Filner and Ranking Member Smith of the
Armed Services Committee. It passed by an overwhelmingly bipartisan
vote of 394-27, including the majority of Members on this Committee.
Here is what the legislation would do. First, under current law,
some home foreclosure protections for servicemembers are set to expire
at the end of this year. My legislation would fix that by eliminating
this sunset provision and ensuring that foreclosure protections are
extended to 12 months. We need to act this year to make sure those
protections do not expire.
My legislation also would ensure that servicemembers serving in
contingency operations, such as in Iraq and Afghanistan, do not have to
worry about losing their homes, regardless of when they were purchased.
In addition, it would extend foreclosure protections to the
surviving spouses of servicemembers who are killed in the line of duty,
as well as to veterans who are 100% disabled due to service-connected
injuries at the time of discharge.
Finally, the legislation would prohibit discrimination against
servicemembers and their families who are covered by these protections,
and it would double penalties to deter future violations.
I crafted this legislation after more than a year of investigating
cases in which military servicemembers and their families had suffered
illegal foreclosures and inflated fees.
For example, last July, I issued a staff report documenting these
abuses entitled ``Fighting on the Home Front: The Growing Problem of
Illegal Foreclosures Against U.S. Servicemembers.'' I ask that this
report be included in the record.
In addition, Senator Jay Rockefeller, the Chairman of the Senate
Commerce Committee, joined me in co-hosting a congressional forum on
this topic with a number of officials, including Holly Petraeus, the
Director of the Office of Servicemember Affairs at the Consumer
Financial Protection Bureau, who appeared alongside servicemembers and
others to provide recommendations.
I also want to extend my thanks to Ranking Member Braley, who
participated in that bicameral forum, is an original co-sponsor to my
legislation and has been integral to our efforts over the past year.
The results of our investigation demonstrate the clear need for
these improvements to the SCRA. Nobody fighting abroad to protect our
country should also have to fight here at home just to keep a roof over
the heads of their loved ones.
I thank the members of this Committee for supporting my
legislation, and even though it has passed the House as part of the
NDAA, I ask my colleagues on both sides of the aisle to continue to
work together to ensure that we enact these reforms into law.

Prepared Statement of Hon. John Garamendi

Chairman Stutzman, Ranking Member Braley, and Members of the House
Veterans Affairs Committee Subcommittee on Economic Opportunity, thank
you for the opportunity to testify on behalf of my bill, H.R. 3860, the
Help Veterans Return to Work Act. It's an honor to be before you today.
I represent the 10th District of California, home to Travis Air
Force Base, the largest Air Mobility Command unit in the Air Force.
Nearby in Marysville, California, is Beale Air Force Base, which is the
leader in Intelligence, Surveillance and Reconnaissance (ISR) with
major weapon systems including the U2, MC-12 and Global Hawk. Together,
Travis and Beale employ nearly 16,000 servicemembers across active
duty, National Guard, and the Reserves, and over 75,000 veterans live
in my district and the surrounding area.
My bill, the Help Veterans Return to Work Act, addresses a major
problem not only in Northern California, but throughout the U.S. -the
tragically high unemployment rate among veterans. Specifically, my bill
seeks to increase the reemployment rate among veterans by amending the
undue hardship provision under the Uniformed Services Employment and
Reemployment Rights Act (USERRA). Currently, an employer is excused
from reemploying a returning veteran if the employer's circumstances
have changed in a way that it is now impossible or unreasonable to do
so, or imposes an ``undue hardship.'' This undue hardship provision is
too lenient in allowing employers to dismiss deployed servicemembers.
As a reflection of this problem, the number of USERRA complaints and
inquiries reported to the Employer Support of Guard and Reserve, a
Department of Defense (DoD) agency, increased 164 percent between 2008
and 2010. The Veterans Reemployment Act of 2012 amends USERRA so that
undue hardship protections apply only to small businesses, eliminating
the protections for large businesses.
In May of 2012, the Bureau of Labor and Statistics Current
Population Survey (BLS CPS) reported that the unemployment rate among
all veterans is 7.7%, which is slightly below the national unemployment
rate. This dynamic is consistent with historical trends. Traditionally,
the veteran unemployment rate has been lower than that of nonveterans.
Still, the fact that 7.7% of our veterans are unemployed is
unacceptable for a Nation likes ours. However, this number, which
represents the unemployment rate among all veterans, pales in
comparison to the unemployment rate among veterans in the 18 to 24
year-old age group, which is an alarming 23.5% -over 8% higher than the
national unemployment rate for that age group (15.3%).
VetJobs, a premier employment service for veterans and a witness
before this Subcommittee in February 2012, has estimated that the
unemployment rate for young veterans will increase even more as the DoD
starts to furlough active duty troops and as many of the National Guard
and Reserve brigades start to return from theatre.
This unemployment gap must be closed, and as the body that made the
decision to send these brave men and women to war, it's our
responsibility to ensure that they can return home to a job that
enables them to support themselves and their families in the same
manner as they did prior to deployment. Amending the undue hardship
protections under USERRA, which my bill seeks to do, will bring us one
step closer to fulfilling our obligation to our veterans. Thank you,
Mr. Chairman, I look forward to any questions your Subcommittee may
have.

Prepared Statement of Hon. Steve Stivers

I want to thank Chairman Stutzman and Ranking Member Braley for
holding this important legislative hearing today on my legislation, the
Helping Iraq and Afghanistan Veterans Return to Employment (HIRE) at
Home Act. Also, I would like to thank my lead Democrat co-sponsor
Representative Tim Walz of Minnesota for tackling this important issue
with me.
The measure before the Committee today is designed to improve
cooperation between the military and state agencies to more closely
align specialized military training and state licensing and
certification requirements.
The legislation came from an idea shared by a group of local
veterans at a roundtable I held in my District in Columbus, Ohio. I am
grateful to that group of local veterans for bringing this problem to
my attention--including three young veterans Angela King, Dustin Crum
and David Warnock. With the number of veterans returning from Iraq and
Afghanistan, we need to make every effort to help our returning
military transition back to jobs in their local communities.
I have served over 26 years in the Ohio Army National Guard and
have been honored to serve with so many brave men and women over the
years. Our servicemembers and veterans have protected the United States
at immense personal cost to themselves and their families -to defend
our Nation and its ideals of democracy and freedom. They and their
families deserve our respect and our gratitude, and we owe a debt to
them for their service.
As many of you know, unemployment among post-9/11 veterans is 12.7
percent, according to a recent Bureau of Labor Statistics report. By
allowing military training in a comparable field to count toward
certification in the private sector, it will help get veterans back to
work more quickly once they are back with their families.
Specifically, the HIRE at Home Act would apply when a veteran is
seeking State certifications or licenses to become a state-tested
nursing assistant, EMT, certified nursing assistant, registered nurse
or commercial truck driver. This legislation simply encourages states
to consider our servicemembers' experience, which could allow them to
skip expensive and time-consuming hurdles to employment.
My legislation will not only help veterans be more competitive in
the job market but also help them land better jobs. For example, an
Army medic who administered medication to wounded soldiers and was
responsible for their lives on the battlefield, could not be certified
as an emergency medical technician (EMT) in our local communities
without redundant schooling. This bill would make that transition much
easier.
It is encouraging that the Department of Defense (DoD) released a
report identifying several education and training issues it hopes to
resolve, including having military training pre-approved within state
credentialing options.
While serving our country, our military men and women perform high-
skilled jobs, often under intense and dangerous conditions. One of the
best ways to honor their service would be to give them the opportunity
to do the same job, without unnecessary and burdensome hurdles at home.
Again, I appreciate the Chairman and Ranking Member for allowing me
to testify today and holding this hearing.

Prepared Statement of Ryan M. Gallucci

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
On behalf of the more than 2 million men and women of the Veterans
of Foreign Wars of the U.S. (VFW) and our Auxiliaries, I would like to
thank you for the opportunity to testify on today's pending
legislation. With the conflict in Iraq drawing to a close, withdrawal
from Afghanistan on the horizon, and proposals to scale back our
nation's active duty military while continuing to lean on National
Guard and Reserve personnel for future routine missions, the VFW
believes discussing how to protect our servicemembers and veterans
within the workforce and streamlining processes through which veterans
can secure meaningful employment must remain a national imperative.
Despite continuing efforts within the Federal government and across
private industry, recent unemployment numbers for veterans of the
current conflicts indicate that that we are not solving the problem.
The VFW is encouraged to see that this Committee continues to take this
situation seriously, and we are honored to share our thoughts on
today's bills in an effort to protect our nation's heroes and offer
them the career opportunities for which their military training and
experience logically prepared them.
H.R. 3860, Help Veterans Return to Work Act:
The VFW understands that the goal of this legislation is to ensure
that large businesses can no longer claim ``undue hardship'' as a
reason to shirk reemployment obligations under the Uniformed
Servicemembers Employment and Reemployment Rights Act (USERRA).
However, the VFW must oppose this bill, which we believe would make
members of the National Guard and Reserve unattractive employees to
large companies. This issue is truly a double-edged sword. The VFW
wholly supports strong legal protections for members of the Guard and
Reserve, but we understand that the relationship between our Reserve
Component and civilian employers must be equitable for both parties. We
feel the current provisions through which large businesses can claim
undue hardship offers both the servicemember and the employer
reasonable due process in resolving reemployment disputes.
If we put so many legal constrictions on hiring members of the
Reserve Component, our servicemembers will be perceived as a legal
liability to potential employers, large and small. A recent report from
the Center for a New American Security (CNAS) outlined the business
case for hiring servicemembers and veterans. In the report, CNAS also
ranked employer concerns for hiring current or former military
personnel. One of the major concerns for employers included potential
deployments and USERRA compliance. To the VFW this implies that the
perception of USERRA among employers may actually prevent
servicemembers and veterans from ever getting in the door.
In light of this bill and other concerns over USERRA, we invite the
Subcommittee to host a separate hearing or roundtable discussion on
USERRA in the 21st Century to better understand how this law should be
implemented and how we can best serve the interests of our Reserve
Component servicemembers and the companies that employ them.
H.R. 4115, HIRE at HOME Act:
The VFW fully supports the HIRE at HOME Act. Over the last few
years, we have heard growing concerns that veterans who receive highly
technical training in the military and amass years of practical work
experience cannot receive state licenses and certifications without
jumping through hoops when they return home. The VFW understands that
states have a legal right to license professionals as they see fit
within their borders. However, the VFW believes that states must have
the ability to evaluate the training and experience of a veteran once
they leave active duty. The HIRE at HOME Act will ensure that states
critically evaluate military training when considering veterans for
licensure in four key fields where we have seen high veteran
unemployment: Certified nursing assistant, registered nurse, emergency
medical technician, and truck driver.
The VFW successfully pushed for a companion to the HIRE at HOME Act
in the Senate, with some minor changes, which we would like to see this
Subcommittee also include in markup. The changes simply outlines how
states should report the ways in which they considered military
training and experience toward state licensing requirements.
Specifically, states would report to the Department of Labor at a
minimum: The state standard for licensure in each field; the specific
military training components evaluated for licensure; and any gaps in
training that prohibit veterans from licensure. The Department of Labor
would then establish protocols to share this information with the
Department of Defense in an effort to close training gaps.
The VFW believes this bill is a responsible first step in ensuring
veterans can transition seamlessly into careers that the military has
diligently prepared them for, while preserving each state's right to
license professionals who choose to operate within their borders.
Moving forward, this concept could prove helpful in closing the
credentialing and licensing gap for other critical military
occupational specialties (MOSs) without placing unnecessary burdens on
states. We encourage the Subcommittee to move quickly on this critical
bill, passing a comprehensive piece of legislation that reflects the
VFW's recommendations and helps to close the military credentialing
gap.

H.R. 4740, Fairness for Military Homeowners Act of 2012:
The VFW supports this bill and we believe it is a responsible
course of action offering financial relief for military home owners who
are forced to frequently change duty stations. Unlike traditional home
owners, military home owners must regularly change duty stations. In
the past, military home owners could easily sell or rent their
properties whenever they needed to move. This all changed when the
housing bubble burst in 2008. This bill would offer relief to military
families by allowing military home owners to refinance the mortgage on
homes at their old duty stations as if the home was still a primary
residence. Home owners who seek to refinance will encounter higher
interest rates if they do not actively live at the property. This bill
would ensure that military home owners can still lock in reasonable
interest rates when they are forced to leave a home at their old duty
station. This is a common sense approach that will offer reasonable
relief to military home owners who must balance family obligations with
the rigors of military life.

H.R. 5747, Military Family Home Protection Act:
The VFW strongly supports this bill, which seeks to end predatory
foreclosures on military families whose loved ones are deployed,
permanent and total disabled, or who lost their lives in the line of
duty. Over the last few years, we have heard horror stories about
companies foreclosing on military home owners while servicemembers are
deployed overseas. This bill seeks to end this unconscionable practice
by affording specific protections for deployed servicemembers, disabled
veterans, and surviving spouses. This bill even goes so far as to
establish criminal penalties for persons who knowingly violate these
new provisions under the Servicemembers Civil Relief Act, or SCRA.
Never again should a military family worry that the bank will seize
their home while their loved one is serving overseas or after their
loved one has made the ultimate sacrifice. Military home owners face
unique circumstances, and deserve these kinds of reasonable
accommodations. We hope the Committee will move quickly on this bill.
Mr. Chairman, this concludes my testimony and I would be happy to
answer any questions you may have.
Information Required by Rule XI2(g)(4) of the House of Representatives
Pursuant to Rule XI2(g)(4) of the House of Representatives, VFW has
not received any Federal grants in Fiscal Year 2012, nor has it
received any Federal grants in the two previous Fiscal Years.

Prepared Statement of Hon. Steve L. Gonzalez

Chairman Stutzman, Ranking Member Braley and distinguished Members
of the Subcommittee:
Thank you for this opportunity to present The American Legion's
views on the several pieces of legislation being considered by the
Subcommittee today. The American Legion commends the Subcommittee for
holding a hearing to discuss these very important and timely issues.
Chairman Stutzman, Ranking Member Braley and distinguished Members
of the Subcommittee:
On behalf of the 2.4 million members of The American Legion I thank
you for this opportunity to submit The American Legion's views on the
legislation being considered by the Subcommittee today. We appreciate
the efforts of this Subcommittee to address the different needs of the
men and women who are currently serving and those who served during
past conflicts.
H.R. 5747: Military Family Home Protection Act
Amends the Servicemembers Civil Relief Act (SCRA) to improve the
protections for servicemembers against mortgage foreclosures, and for
other purposes.
While servicemembers fight overseas, another war has been brewing
back home: foreclosures. Since the 2006 collapse of the real estate
market, tens of thousands of military servicemembers have lost their
homes to foreclosure. History has shown even those putting their lives
on the line for their country may not be safe from foreclosure. America
simply cannot afford to have our men and women in Iraq, Afghanistan, or
elsewhere distracted by concerns over whether someone is seeking a
default judgment against them back home, or evicting their spouse and
children, or selling their house at an auction sale. H.R. 5747,
Military Family Home Protection Act, would provide mortgage protection
for members of the armed services, surviving spouses and certain
veterans. This legislation would expand the statute covering
servicemembers that are part of a ``contingency operation'', that is,
anyone who is or could become involved in military actions, are called
up to or retained in active-duty service.
Additionally, H.R. 5747 would expand SCRA to cover any veteran who
is totally disabled, regardless of when his or her obligation arose,
and surviving spouses of servicemembers who died in service, regardless
of obligation of service. It would also expand the period covered to
include any proceeding filed within 12 months of the servicemember's
military service, and apply protections for veterans and surviving
spouses with regard to any action filed within 12 months of the
servicemember's retirement or death.
In the past, military servicemembers and their families have been
foreclosed upon illegally. Whether or not this has been due to
carelessness or callousness neither is acceptable. H.R. 5747, Military
Family Home Protection Act, seeks to strengthen the law to ensure that
America's servicemembers have ample time to handle financial matters,
while transitioning from their active-duty service.
The American Legion supports this bill.
H.R. 3860: Help Veterans Return to Work Act
Amends title 38, United States Code, to clarify the
responsibilities of small businesses with respect to the employment and
reemployment rights of veterans.
H.R. 3860 closes a loophole that allows larger corporations to
refrain from rehiring National Guard and Reserve members who were sent
into combat in service of our country. Current law, as set by the
Uniformed Services Employment and Reemployment Rights Act of 1994
(USERRA), is too lenient in allowing employers, regardless of size, to
dismiss deployed servicemembers. It is estimated that nearly half of
unemployed veterans are National Guard and Reserve members. This bill
would help ensure that those who leave behind jobs to defend our Nation
will be guaranteed those jobs when they return home.
Currently, an employer is excused from reemploying a returning
veteran if the employer's circumstances have changed in a way that it
is now impossible or unreasonable to do so, or imposes an ``undue
hardship.'' The Help Veterans Return to Work Act of 2012 would amend
USERRA so that undue hardship protections would apply only to small
businesses, eliminating the protections for large businesses.
The American Legion supports this bill.
H.R. 4740: Fairness for Military Homeowners Act of 2012
Amends the Servicemembers Civil Relief Act (SCRA) to ensure that
relocation of a servicemember to serve on active duty away from the
servicemembers' principal residence does not prevent the servicemembers
from refinancing a mortgage on that principal residence.
Military service often requires relocation due to the nature of the
profession. America's servicemembers should be able to expect equal
treatment as any other American homeowner when refinancing their
mortgages. Currently, active-duty military servicemembers cannot
refinance their homes if the home is not owner-occupied by the
servicemember.
H.R. 4740, Fairness for Military Homeowners Act of 2012, would
amend section 303, title 50, of the United States Code (USC) by adding
section 303A, which would allow servicemembers who are unable to reside
in a residence where they are the mortgagor due to military service.
This legislation would allow them to apply for a mortgage refinance,
regardless of their residency status. However, H.R. 4740, Fairness for
Military Homeowners Act of 2012, does include provisions which limit
the ability of a servicemember to refinance a mortgage if they have
refinanced within the preceding 5 year period.
The American Legion supports this bill.

H.R. 4115: Helping Iraq and Afghanistan Veterans Return to Employment
at Home Act

Requires states to align their certification for nursing assistant,
certified nursing assistant, registered nurse, or commercial driver's
license with military training standards.
In early 1996, The American Legion launched the first
groundbreaking credentialing report to study those vocational skills
for which the armed services provide training and for which a license
of certificate is required to work in this field in the civilian
economy. The education, training and experience obtained during an
individual's military service not only provides tangible benefits for
the nation's defense, but can also contribute significantly to a highly
skilled civilian workforce. The military invests millions of dollars
training its uniformed personnel, providing a broad base of knowledge
and experiences that can carry over to civilian occupations. However,
transitioning from military occupations to civilian jobs can present
significant challenges for servicemembers.
These servicemembers and veterans have attended some of the finest
technical and professional training schools in the world. These
military men and women are graduates with experience in health care,
electronics, computers, engineering, drafting, air traffic control,
nuclear power plant operations, mechanics, carpentry, and many other
fields. Many of their skills require some type of license or
certificate to find a career in the civilian workforce. In many cases,
this license or certificate requires schooling which has already been
completed by attendance at an armed forces training institution.
Unfortunately, the agencies which issue the license or certificate do
not recognize the training or experience already completed. For
example, a medic who treated gunshot wounds on the battlefields of
Afghanistan will not be certified as an emergency medical technician
(EMT) in our nation's cities without additional redundant schooling.
When civilian credentialing boards, states, and employers fail to
fully recognize military education, training and experience, both the
servicemember and the Nation are impaired. The veteran faces reduced
chances of obtaining a job on par with his/her skills, and the civilian
workforce cannot take full advantage of the extensive skills training
in which our Nation has invested.
H.R. 4115: Helping Iraq and Afghanistan Veterans Return to
Employment at Home Act, would establish as a condition for certain
Federal funds to be disbursed to states. It would require that states
take military training into consideration for certification or
licensure for State tested nursing assistant or a certified nursing
assistant, registered nurse, emergency medical technician and
commercial driver's license.
The American Legion applauds Representative Steve Stivers (OH) and
Tim Walz (MN) for their leadership and efforts to tackle and address
this issue. This Committee should also be aware of additional
legislation, as well as other actions members of Congress have
undertaken which will help this problem. There are as follows:

Representatives Jeff Denham (CA) and Walz (MN) H.R. 4155,
Veteran Skills Work Act, which will streamline the credentialing access
for servicemembers and remove the bureaucracies from it, allowing
relevant military training to become equivalent to Federal licensing
and certification requirements.
Representative Joe Walsh (IL) included an amendment to
the FY 2013 National Defense Authorization Bill regarding
credentialing. This amendment would modify the previous pilot program
by striking more than five military occupational specialties (MOS);
therefore, allowing the Department of Defense to expand the amount of
MOS's the pilot programs can study.

The American Legion will continue to lead on this front and will
make every effort to assist and enhance them where possible.
The American Legion supports this bill.
The American Legion appreciates the opportunity to comment on the
bills being considered by the Subcommittee. I would be happy to answer
any questions you might have. Thank you.

Executive Summary:

The American Legion supports H.R. 5747: Military Family Home
Protection. The American Legion believes servicemembers should not be
distracted in Iraq, Afghanistan, or elsewhere by concerns over whether
someone is seeking a default judgment against them back home, or
evicting their spouse and children, or selling their house at an
auction sale. This legislation would expand the statute covering
servicemembers that are part of a ``contingency operation'', that is,
anyone who is or could become involved in military actions, are called
up to or retained in active-duty service.
The American Legion supports H.R. 3860, Help Veterans Return to
Work Act. The American Legion believes current law, as set by the
Uniformed Services Employment and Reemployment Rights Act of 1994
(USERRA), is too lenient in allowing employers, regardless of size, to
dismiss deployed servicemembers. The Help Veterans Return to Work Act
of 2012 would amend USERRA so that undue hardship protections would
apply only to small businesses, eliminating the protections for large
businesses.
The American Legion supports H.R. 4740, Fairness for Military
Homeowners Act of 2012. The American Legion believes America's
servicemembers should be able to expect equal treatment as any other
American homeowner when refinancing their mortgages. H.R. 4740 ensures
that servicemembers are treated equal, as well as allow servicemembers
who are unable to reside in a residence where they are the mortgagor
due to military service. This legislation would allow them to apply for
a mortgage refinance, regardless of their residency status.
The American Legion supports H.R. 4115, Helping Iraq Afghanistan
Veterans Return to Employment at Home Act. The American Legion believes
servicemembers and veterans have attended some of the finest technical
and professional training schools in the world. Many of their skills
require some type of license or certificate to find a career in the
civilian workforce. In many cases, this license or certificate requires
schooling which has already been completed by attendance at an armed
forces training institution. Unfortunately, the agencies which issue
the license or certificate do not recognize the training or experience
already completed. H.R. 4115: Helping Iraq and Afghanistan Veterans
Return to Employment at Home Act, would establish as a condition for
certain Federal funds to be disbursed to states. It would require that
states take military training into consideration for certification or
licensure for State tested nursing assistant or a certified nursing
assistant, registered nurse, emergency medical technician and
commercial driver's license.

Prepared Statement of Major General Andrew ``Drew'' Davis, USMC (Ret)

INTRODUCTION

Mr. Chairman and members of the Subcommittee, the Reserve Officers
Association (ROA) and the Reserve Enlisted Association (REA) would like
to thank the Subcommittee for the opportunity to testify. ROA and REA
applaud the ongoing efforts by Congress to address issues facing
veterans and servicemembers such as employment challenges, problems
within the home loan programs, SCRA and more.
Though contingency operations in Afghanistan are being wound down,
currently there are still high levels of mobilizations and deployments
for Reserve and Guard members, and many of these outstanding citizen
soldiers, sailors, airmen, Marines, and Coast Guardsmen have put their
civilian careers on hold while they serve their country in harm's way.
As we have learned, they share the same risks as their counterparts on
the battlefield in the Active Components. Over 848,000 Reserve and
Guard servicemembers have been activated since September 11. Of these
more than 275,000 have been mobilized two or more times. The United
States is creating a new generation of combat veterans that come from
its Reserve Components (RC). It is important, therefore, that we do not
squander this valuable resource of experience, nor ignore the benefits
that they are entitled to because of their selfless service to their
country.
Unfortunately, unemployment continues to run about 10 percent
higher for younger Reserve and Guard members than for non-affiliated
veterans. ROA and REA would like to work with this Committee to develop
solutions that would focus on this age group.
Reserve Association's Agenda Summary
Employer Support:

Continue to enact tax credits for health care and
differential pay expenses for deployed Reserve Component employees.
Provide tax credits to offset costs for temporary
replacements of deployed Reserve Component employees.
Support tax credits to employers who hire servicemembers
who supported contingency operations.

Employee Support:

Permit delays or exemptions while mobilized of regularly
scheduled mandatory continuing education and licensing /certification/
promotion exams.
Continue to support a law center dedicated to USERRA/SCRA
problems of deployed Active and Reserve servicemembers.

Uniformed Services Employment and Reemployment Rights Act (USERRA)
/ Servicemembers' Civil Relief Act (SCRA):

Improve SCRA protections for deployed members from
creditors that willfully violate SCRA.
Fix USERRA/SCRA to protect health care coverage of
returning servicemembers and family for pre-existing conditions, and
continuation of prior group or individual insurance.
Enact USERRA protections for employees who require
regularly-scheduled, mandatory continuing education and licensing/
certification and make necessary changes to USERRA to strengthen
employment and reemployment protections.
Exempt Reserve Component members from Federal law
enforcement retirement application age restrictions when deployment
interferes in completing the application to buy back retirement
eligibility.
Amend SCRA to prohibit courts from modifying previous
judgments that change the custody arrangements for a child of a
deployed servicemember.
Encourage Federal agencies to abide by USERRA/SCRA
standards.
Ensure that USERRA is not superseded by binding
arbitration agreements between employers and Reserve Component members.
Make the states employers waive 11th Amendment immunity
with respect to USERRA claims, as a condition of receipt of Federal
assistance.
Amendments to Title 38 about Employment
Notwithstanding the protections and antidiscrimination laws in
effect for veterans and serving members, it is not unusual for members
to lose their jobs due to time spent away while deployed. Sometimes
employers are going out of business, but more often it is because it
costs employers money, time, and effort to reintroduce the employee to
the company.
ROA and REA support the passages of HR.3860 and HR.4115, which
would improve the efficiencies of veteran's employment and training
under Title 38 U.S.C.

Small Business hiring of Reserve and Guard members

Deployment of Reserve and Guard members has the hardest impact on
small businesses. Such businesses are the backbone of the American
economy, and are expected to do the majority of the hiring in the near
future. The Small Business Administration defines a small business
(depending on the industry) as a business with fewer than 500
employees. A micro-business is defined as having fewer than 10
employees.
ROA supports initiatives to provide small business owners with
protections for their businesses while a Reserve Component employee is
on deployment. Employer care plans should be developed in a way that
will assist with mitigation strategies for dealing with the civilian
workload during the absence of the servicemember employee and lay out
how the employer and employee would remain in contact throughout the
deployment.
H.R.3860: Help Veterans Return to Work Act, as introduced by Reps.
John Garamendi (Calif.) and Bobby Rush (Illinois) amends USERRA to
better define which businesses can claim hardship if unable to rehire a
Reserve Component member. If this amendment is enacted, only ``small
business concerns'' would be able to take advantage of this affirmative
defense.
It is important to note that the ``undue hardship'' defense only
applies to a small minority of reemployment claims. This mainly applies
to those servicemembers who have disabilities that were incurred or
aggravated during uniformed service, and after reasonable efforts by
the employer to accommodate the disability, is not qualified due to
such disability to be employed in the position of employment. The
employer must also make every effort to place the veteran into another
position within that company.

Recognition of Active Duty experience for civilian employment

There is an ongoing challenge on how to convert military skill sets
into credited experience that would be recognized by civilian employers
and provide longevity credit during a licensing or credentialing
process. Cross-licensing/credentialing would ease the burden of having
to acquire new licenses/credentials in the private sector after having
gained experience to perform such duties during military service.
ROA and REA encourage the implementation of certifications or a
form that would inform employers of skills potential veteran and
servicemember employees gained through their military service.
H.R.4115: the HIRE at HOME Act, as introduced by Reps. Steve
Stivers (Ohio) and Tim Walz (Minn.) codifies the need to credit any
such military training as one of the program functions of the Assistant
Secretary of Labor for Veterans' Employment and Training. Subparagraph
(9)(B) also describes certain military skills, and provides a location
to include additional skills in the future as they are identified.
Servicemembers Civil Relief Act - Home Mortgages
ROA and REA support the passage of H.R.4740, which would improve
the veteran's mortgage protections under the SCRA.
Currently, under the SCRA, members of the Armed Forces are granted
nine months of protection from non-judicial mortgage foreclosure after
returning home from Active Duty. This temporary moratorium on civil
action allows servicemembers to return home and re-adjust to civilian
life while at the same time pooling their funds to repay debts such as
mortgages. But protections are also needed while individuals are away
from ``home of record,'' as well. Often, serving members want to retain
homes as a place of retirement, but are required to relocate on new
military assignments.
H.R.4740: Fairness for Military Homeowners Act of 2012, as
introduced by Rep. Duncan Hunter (Calif.) protects serving members from
being denied refinancing should they no longer reside in the premises
because of a relocation caused by permanent change of station (PCS) or
a deployment of 18 months or longer. ROA supports this change to
legislation because it affects Full Time (AGR or FTS) Reserve or Guard
members as well as Active Duty servicemembers.
A risk of refinancing is that the mortgage may lose its protections
under SCRA, by becoming a new obligation, rather than one existing
prior to military service.
The group that is excluded under this H.R.4740 would be drilling
Reserve or Guard members. For over five years, the Department of
Defense policy has been that the duration of involuntary mobilization
would be no longer than 12 months.
This bill would apply to those individual Reserve and Guard members
who volunteer for periods longer than 12 months. PCS orders would also
apply, as the Department of the Army has tried to use PCS orders for
Reservists who are mobilized longer than 179 days. Volunteers can serve
up to three years, but often this is accomplished through a series of
annual orders.
H.R.5747: the Military Family Home Protection Act, introduced by
Rep. Elijah Cummings (Md.) while noble in intent; has some
inconsistencies on the mortgaged property it covers:

1. As in current US Code, the Active or Reserve servicemember has
mortgage protection only for property obligations contracted prior to
military service. However,
2. An Active member serving in support of a contingency operation
gains additional protection for properties that are mortgaged at the
time of mobilization or deployment.
3. Veterans are limited to Chapter 61 retirees who were separated
from active duty with a 100 percent disability as determined by the
secretary of veteran affairs. They are covered for any mortgage
obligation in effect 12 months prior to their retirement.
4. A surviving spouse is covered for any mortgage obligation in
effect 12 months prior to the death of a servicemember.

ROA is concerned that . . .

1. A servicemember, if relocated by the service may pay off
original property obligations, but also acquire new mortgage
responsibilities because of service transfers. The SCRA clock would
only be restarted if the active duty individual is deployed to a
contingency operation, but not if the individual has other mission
assignments.
a. This bill does not consider remote hardship tours, such as the
Marines in Okinawa, or soldiers stationed on the DMZ in Korea.

2. The bill states that the Chapter 61 retiree must be 100 percent
service disabled at the time of retirement, yet many individuals are
underrated by Physical Evaluation Boards. Adjustments to claims made by
Veterans Affairs (VA) can take up to a year to be processed, putting a
Chapter 61 veteran who is actually 100 percent disabled at a financial
disadvantage.
a. Further, a Chapter 61 retiree is anyone who was medically
retired from military service with a 30 percent or greater VA rated
disability. There are individuals who are medically retired with less
than a 30 percent rating, who receive a separation payment rather than
a retirement, and then there are individuals who receive regular
retirement and also receive disabilities. Disabilities can cascade, and
veterans from various categories can become 100 percent disabled after
initial ratings. Is this an adequate definition for discharged veterans
who become 100 percent disabled?

3. A surviving spouse qualifies following the death of a
servicemember under this legislation. This does not address whether
this death is in the ``line of duty, or a spouse who may become a
survivor by complications of ``line of duty'' wounds or injuries.

One additional group that may have been overlooked is spouses who
are caretakers for wounded warriors. This would disrupt family income
and have a negative effect on financial obligations.
ROA and REA have no objection to extending protection from 9 to 12
months, but H.R.5747 needs to be reworded to accomplish what is
intended.
Reducing Reserve Component Unemployment
Employers view USERRA as a negative incentive and would like to see
positive encouragement to hire veterans. The VOW to Hire Heroes Act was
a first good step, but does not address the problems faced by Reserve
and Guard members. For younger Reserve and Guard members unemployment
continues to run at about 10 percent higher than non-affiliated
veterans. For the most part those between 18 to 26 years old are from
the Reserve Component.
After 10 years of war, employers are more comfortable hiring
unaffiliated veterans, than those who could be recalled to active duty,
and with a future risk of an operational call-up once every five years.
It is just easier not to hire Reserve and Guard members.
While this may be a violation of the USERRA, stealth discrimination
can easily occur if you do not tell the Reserve Component veteran that
their military career is why they were not hired. Additional positive
incentives are needed for this group of veterans.
Incentives of various types would serve to mitigate burdens and
encourage businesses to both hire and retain Reservists and veterans.
Examples include providing employers - especially small businesses -
with incentives such as cash stipends to help pay for health care for
Reservists up to the amount DoD is contributing. Small businesses are
more likely to hire Guard and Reserve veterans if they could afford to
hire temporary replacements. A variety of tax credits could be enacted
to provide such credit at the beginning of a period of mobilization or
perhaps even a direct subsidy for costs related to a mobilization such
as the hiring and training of new employees.
Conclusion
ROA and REA appreciate the opportunity to submit testimony. ROA and
REA look forward to working with the Subcommittee on Economic
Opportunity and the House Veterans' Affairs Committee on solutions to
these and other issues. We hope in the future for an opportunity to
discuss these issues in person with Committee members and their staff.

*****

The Reserve Officers Association of the United States (ROA) is a
professional association of commissioned and warrant officers of our
nation's seven uniformed services and their spouses. ROA was founded in
1922 during the drawdown years following the end of World War I. It was
formed as a permanent institution dedicated to National Defense, with a
goal to teach America about the dangers of unpreparedness. When
chartered by Congress in 1950, the act established the objective of ROA
to: ``...support and promote the development and execution of a
military policy for the United States that will provide adequate
National Security.''
The Association's 57,000 members include Reserve and Guard
Soldiers, Sailors, Marines, Airmen, and Coast Guardsmen who frequently
serve on Active Duty to meet critical needs of the uniformed services
and their families. ROA's membership also includes commissioned
officers from the U.S. Public Health Service and the National Oceanic
and Atmospheric Administration who often are first responders during
national disasters and help prepare for homeland security.
ROA is a member of The Military Coalition where it co-chairs the
Guard and Reserve Committee. ROA is also a member of the National
Military/Veterans Alliance and the Associations for America's Defense.
Overall, ROA works with 75 military, veterans, and family support
organizations.

President: Col. Walker Williams, USAF (Ret.)
202-646-7706

Staff Contacts:
Executive Director:
Major General Andrew ``Drew'' Davis, USMC (Ret.)
202-646-7706

Legislative Director:
CAPT Marshall Hanson, USNR (Ret.)
202-646-7713

Air Force Director:
Col. Bill Leake, USAFR
202-646-7713

Army and Strategic Defense Education Director:
Mr. ``Bob'' Feidler
202-646-7717

USNR, USMCR, USCGR:
CAPT Marshall Hanson, USNR (Ret.)
202-646-7713

Service Members' Law Center Director:
CAPT Sam Wright, JAGC, USN (Ret.)
202-646-7730

The Reserve Enlisted Association is an advocate for the enlisted
men and women of the United States Military Reserve Components in
support of National Security and Homeland Defense, with emphasis on the
readiness, training, and quality of life issues affecting their welfare
and that of their families and survivors. REA is the only joint Reserve
association representing enlisted reservists - all ranks from all five
branches of the military.

Executive Director
CMSgt Lani Burnett, USAF (Ret)
202-646-7715

DISCLOSURE OF FEDERAL GRANTS OR CONTRACTS

The Reserve Officers and Reserve Enlisted Associations are member-
supported organizations. Neither ROA nor REA have received grants,
subgrants, contracts, or subcontracts from the Federal government in
the past three years. All other activities and services of the
associations are accomplished free of any direct Federal funding.

Prepared Statement of John S. Odom, Jr., Esq.

Chairman Stutzman, Ranking Member Braley and members of the
Subcommittee. My name is John S. Odom, Jr., and I am an attorney from
Shreveport, Louisiana. I am also a retired Air Force judge advocate and
served over 31 years of combined active and Reserve duty. I was
recalled to active duty from retirement during 2010 to author a report
to Congress for the Department of Defense concerning certain matters
related to proposed amendments to the Servicemembers Civil Relief Act.
The vast majority of my civilian law practice is involved with
representing servicemembers in claims they have against banks and other
lending institutions who have violated their rights under the SCRA. In
2011, I was lead counsel for Sgt James Hurley, formerly of the Michigan
Army National Guard, in a suit against his mortgage servicing company,
in what is believed to have been the first Federal jury trial involving
claims under the SCRA in the history of the Act. I am a frequent
lecturer at all of the service judge advocate schools and speak to
judges' associations and both industry and consumer groups around the
country on matters related to the SCRA. From 2006 to 2009, I served on
the American Bar Association Standing Committee on Legal Assistance to
Military Personnel and am the author of A Judge's Benchbook for the
Servicemembers Civil Relief Act, published by the ABA in 2011.
I am grateful for the invitation to appear today and offer comments
and observations on H.R. 4740 and H.R. 5747. At the outset, let me
express my appreciation to this Subcommittee and the entire House
Committee on Veterans' Affairs for following the established
legislative process to consider proposed amendments to the SCRA:
Subcommittee hearings followed by mark-up sessions and full Committee
consideration. In each of the past several sessions of Congress--
including this one--efforts have been made in the House version of the
National Defense Authorization Act to amend the SCRA. In my opinion,
including proposed amendments in that vast piece of legislation,
bypassing the Subcommittee and Committee hearing process during which
the views of experts and practitioners in the field of SCRA litigation
can be heard and considered, does not produce the best legislation our
servicemembers, veterans and their families deserve.
Turning first to H.R. 4740, I fully support the concept that a
servicemember should be able to refinance a home during a period of
active duty even though they may not be residing in the residence as a
result of military orders. I understand from legal assistance attorneys
who consult with me frequently on a variety of SCRA-related topics that
certain mortgage companies take the policy position that a mortgagor
may only refinance the home if he or she currently resides in the home.
Obviously, if the absence from the home is solely as a result of
military orders (regardless of whether it is a mobilized Reserve or
Guard member who is deployed or stationed at a duty location away from
the residence or an active duty member who has complied with permanent
change of station orders and has been unable to sell their home at the
former duty location), such a policy is manifestly unfair to
servicemembers. While H.R. 4740 would legislatively prevent such a
policy, the legislation as currently drafted that will trigger the
dreaded law of unintended consequences.
The Act protects pre-service mortgages from nonjudicial foreclosure
in the 27 states that allow nonjudicial foreclosures. Under H.R. 4740
as drafted, a re-financing of a mortgage while a servicemember is on
active duty would cause the servicemember to lose the protections of
Section 303, since the new mortgage would no longer be a pre-service
obligation. I suggest that additional language needs to be added to
H.R. 4740 to provide that any refinancing accomplished pursuant to this
section would not alter the status of the mortgage as a pre-service
obligation (even though the original debt is being extinguished and
refinanced) so that the protection from nonjudicial foreclosure would
still be in effect for the servicemember. That is a vital protection,
especially for personnel who are deployed and may have no idea about
what is happening with their homes.
As a final comment on H.R. 4740, I also question why section
(b)(1)(B) of the proposed amendment requires that a deployment be for a
period of not less than 18 months to qualify for protection. Many of
our Reserve and Guard units and some Marine Corps units deploy for
periods of less than 18 months. The period of deployment currently
provided for lease cancellation protection under Section 305 of the
SCRA (50 U.S.C. App. Sec. 535(b)(1)(B)) is ``not less than 90 days''
and I would recommend the same period be used in H.R. 4740. Whenever
Congress establishes a different time period to trigger benefits under
the SCRA, it ramps up compliance complexity for the industry and makes
it more confusing for servicemembers.
Turning to H.R. 5747, while the goals of this proposed amendment
are truly laudable, it represents a significant expansion in SCRA
protection and should be evaluated very closely for two reasons: first,
with regard to mortgage foreclosures, this amendment cannot be
realistically implemented as drafted; and secondly, it really does not
fully accomplish what the drafters are trying to do.
I agree completely with Congressman Cummings and the bill's co-
sponsors that the home of any servicemember who is deployed should
never be subject to foreclosure, judicial or nonjudicial, and
regardless of when the mortgage was incurred. There are simply too many
factors that cannot be anticipated when a servicemember deploys and
communication is too difficult from war zones for banks and mortgage
companies to be seizing and selling servicemembers' homes while they
are in harm's way.
While we agree on that fundamental position, I am equally concerned
that Congress not change current Section 303 of the SCRA (50 U.S.C.
App. Sec. 533) which places the onus on creditors to ascertain the
military status of mortgagors prior to nonjudicial foreclosure action.
Under current Section 303, the servicemember is not required to give
any notice to the mortgagee to receive the protections of the Act. The
best way to accomplish the proposed expansion of SCRA mortgage
foreclosure protections contemplated by H.R. 5747 is to insert a new
Section 303A. into the Act.
The deal killer with H.R. 5747 as drafted is simply this: there is
no current database that would allow a foreclosing creditor to
ascertain a servicemember's deployment status, ascertain that a wounded
warrior had been medically retired, or identify a deceased
servicemember's surviving spouse. Protection of all three of those
classes of servicemembers and their families is certainly appropriate,
but the absence of a searchable database will not allow that goal to be
realistically achieved in a manner that is fair to both the
servicemember and the industry. As a litigator, I can tell you that
when judges and juries encounter requirements that cannot be met by the
defendant, they are much less inclined to give the plaintiff any relief
at all. Moreover, Section 303 (50 U.S.C. App. Sec. 533) only applies to
nonjudicial mortgage foreclosures. It does not afford any protections
whatsoever to those servicemembers (or their family members) who own
homes or property in the 23 states which allow only judicial
foreclosures.
If the goal is to protect deployed servicemembers, wounded warriors
and surviving spouses from foreclosure regardless of when their
mortgages were incurred and regardless of where they reside, Congress
should add a separate statutory provision to the SCRA that would do
just that. Since no database exists that would allow creditors to
identify these newly-added classes of protected individuals, requiring
them to give the creditors notice of their status is a reasonable
accommodation to the industry in exchange for these additional
protections. I have drafted the outline of a suggested new section
(Section 303A., 50 U.S.C. App. Sec. 533a.) which is included with my
written remarks. It would accomplish the goals of H.R. 5747, provide
foreclosure protections for all mortgages in all jurisdictions and
avoid the pitfalls of changing current Section 303 (50 U.S.C. App.
Sec. 533). I would be pleased to work with Committee and Member staffs
in any way necessary to help put this suggested Section 303A. into
appropriate form for either introduction as a stand-alone bill or as an
amendment to H.R. 5747.
As for the remaining provisions of H.R. 5747, I wholeheartedly
endorse and recommend approval of each of those subsections. The sunset
provision on extension of nonjudicial mortgage foreclosure protection
needs to be eliminated, the addition of a prohibition against credit
discrimination for persons who may become protected by the SCRA and the
requirement for SCRA compliance officers for the banks are all well-
drafted and needed. I would only caution the Subcommittee that just
because a person may be designated an SCRA compliance officer at a
large bank does not mean he or she has the foggiest idea of what the
SCRA is, or how a bank is supposed to comply with its provisions and
protections. I would urge appropriate oversight for any SCRA compliance
efforts imposed on the financial services industry, because in my past
experience--to put it charitably--many of them know not of what they
speak.
I thank the Members for their attention to these critically
important protections for our servicemembers and their families and
would be pleased to respond to any questions you might have now or in
the future.

Respectfully submitted,

John S. Odom, Jr.
Colonel, USAFR JAGC (ret.)

Outline of an Amendment to the SCRA to Provide Protection of Deployed
Servicemembers, Totally Disabled Servicemembers and Spouses of Deceased
Servicemembers from Mortgage Foreclosures
1. Suggested title for new Section 303A (50 U.S.C. App. Sec. 533a):

``Protection of deployed servicemembers, totally disabled
servicemembers and spouses of certain deceased servicemembers from
mortgage foreclosure, both judicial and nonjudicial, regardless of when
the obligation was incurred''

2. Who would be protected:

a. Deployed servicemembers;
b. Totally disabled former servicemembers; and
c. Surviving spouses of servicemembers whose death was service-
connected

3. Where the appropriate definitions would be placed in the Act:

All definitions would be included in Section 101 (``Definitions'')
of the SCRA (50 U.S.C. App. Sec. 511).

4. Nature of protection:

If an obligor on a mortgage is a deployed servicemember, a disabled
veteran, or a qualifying surviving spouse, in the event of a default in
the obligation or mortgage and without regard to when the obligation
was created, provided that the protected person (the deployed
servicemember, disabled veteran or surviving spouse as defined in the
Act) had given written notice to the mortgagee, trustee or other holder
of the obligation of the protected person's status and documentation of
the protected person's status was submitted to the obligee on the
mortgage, no foreclosure action could be filed or completed in any
court or nonjudicial foreclosure proceedings initiated during the
protected period.

5. Duration of protected period:

a. For deployed servicemembers: duration of the deployment plus 12
months;
b. For wounded warriors: 12 months from classification as totally
disabled;
c. For surviving spouses: 12 months from death of spouse.

6. Notice required to be given:

The notice required to be given must be in writing and addressed to
the same address as last payment made under the mortgage or other
obligation. The Secretary of Defense would be designated to design and
promulgate an official Department of Defense form that could be
utilized to give such notice, although any written notice would suffice
if it provided sufficient information to put the mortgagee or other
creditor on notice of the protected person's status.

7. When required notice must be given:

a. For deployed personnel:
The notice required to be given could be given up to 90 days prior
to the deployment, at any time during the deployment or during the
additional 12 month period following the deployment.
b. For totally disabled veterans and surviving spouses, the notice
required to be given could be given at any time during the 12 month
protected period.

8. Actions required by obligee on mortgage upon receipt of notice:

Upon receipt of such written notice, any mortgagee, trustee or
other creditor seeking to foreclose on property protected by the
section would be required to immediately stay any judicial foreclosure
proceeding until the expiration of the period of protection or to
immediately halt any nonjudicial foreclosure proceedings that may have
been initiated until the expiration of the period of protection.

Proposed by:

John S. Odom, Jr.
Colonel, USAFR JAGC (ret.)
Jones & Odom, L.L.P.
2124 Fairfield Avenue
Shreveport, Louisiana 71104
318-221-1600
john.odom@jodplaw.com
STATEMENT OF JOHN S. ODOM, JR. CONCERNING FEDERAL GRANTS OR CONTRACTS
I certify that I have received no Federal grant or contract
relevant to the subject matter of my 21 June 2012 testimony before the
Economic Opportunity Subcommittee of the House Committee on Veterans'
Affairs during the current or previous two fiscal years.
Shreveport, Louisiana, this 18th day of June, 2012.

/signed/
John S. Odom, Jr.

Prepared Statement of Mike Frueh

Mr. Chairman, Ranking Member Braley, and Members of the
Subcommittee, I am pleased to provide the comments of the Department of
Veterans Affairs (VA) on the legislation detailed below. Joining me
today is John Brizzi, Deputy Assistant General Counsel.
Certain bills under discussion today affect programs or laws
administered by the Department of Labor, the Department of Defense
(DoD), and the Department of Justice. Respectfully, we defer to those
agencies' views with regard to the following bills: H.R. 3860 (limiting
the availability of an undue hardship defense under the Uniformed
Services Employment and Reemployment Rights Act to small businesses);
H.R. 4115 (conditioning receipt of certain funds by a state on that
state considering a Veteran's active-duty training in granting specific
certificates); and H.R. 5747 (amending the Servicemembers Civil Relief
Act (SCRA) to improve protections for Servicemembers against mortgage
foreclosures).

H. R. 4740
H.R.4740, the ``Fairness for Military Homeowners Act of 2012,''
would add a new section 303A to the SCRA to ensure that the relocation
of a Servicemember to serve on active duty away from the
Servicemember's principal residence would not prevent the Servicemember
from refinancing a mortgage on such residence. VA does not oppose H.R.
4740, but notes that it could impact loan subsidy costs.
VA currently guarantees two types of refinances. The Interest Rate
Reduction Refinance Loan (IRRRL) is the more common option, as it is
obtained by Veterans who already have VA-guaranteed loans but want to
reduce their interest rates. Section 3703(e) of title 38, United States
Code, does not make occupancy a requirement for IRRRLs because the
Secretary already has a contingent liability on the loan being
refinanced, and any reduction in interest rate could help VA avoid a
loss on a guaranty claim payment. Therefore, H.R. 4740 would not change
the way the Secretary administers IRRRLs.
The other type of refinance--a regular or cash-out refinance--
usually occurs when a Veteran refinances a loan that is not already
guaranteed by VA. Because 38 U.S.C. Sec. 3710(a)(5) includes occupancy
as a requirement for these types of refinances, H.R. 4740 would affect
the number of Veterans eligible to obtain them. VA cannot estimate the
cost impact of this bill, however, because VA does not have data on the
number of Veterans who are currently obligated on loans that are not
VA-guaranteed, nor do we know how many of such Veterans might need to
obtain a regular refinance pursuant to H.R. 4740.

H.R. 5747
H.R. 5747, the ``Military Family Home Protection Act,'' would
expand the mortgage protections of the SCRA to include Servicemembers
who have served in support of a contingency operation, certain disabled
Veterans, and surviving spouses. The bill would further extend from 9-
months to 12-months the period within which the protections apply once
a Servicemember's period of service ends, and make such extension
permanent. It would also increase the civil penalties associated with a
pattern of violations and with violations of significant public
interest.
Although VA defers to the Departments of Defense and Justice on the
merits of this bill, we offer the following comments.
Section 303 of the SCRA, as proposed to be amended, would continue
to protect Servicemembers who obtained mortgage obligations prior to
the time their military service began and whose military service had a
material effect on their ability to repay their mortgage obligations.
The newly covered individuals would receive more protections, however,
as their mortgages could be originated at any time, even after the
period of military service began.
Amended section 303(f)(1)(B) would define newly covered individuals
to include Veterans who were retired under chapter 61 of title 10,
United States Code, and are also ``totally disabled.'' It would be
helpful if this were clarified to indicate whether ``totally disabled''
is intended to refer to those Veterans who have been rated by VA as
having permanent and total service-connected disabilities. Likewise, as
this provision is currently drafted, we cannot be certain whether the
term ``surviving spouse'' in proposed section 303(f)(1)(B) is intended
to mean a survivor who meets the criteria of 38 U.S.C. Sec. Sec.
101(3) and 103. VA would be pleased to work with the Subcommittee staff
to draft the necessary clarifications.
Mr. Chairman, expanding the types of covered individuals eligible
for SCRA protections would have an effect on VA's loan subsidy, as
would extending from 9-months to 12-months the period in which the
protections would apply after a Servicemember's period of service ends,
as well as making such extension permanent. We also note that a newly
covered Veteran would almost always be eligible to assert the
protections. VA is unable to estimate the full cost impact of this
proposal before today's hearing, but will provide an estimate for the
record.
In addition, we note that DoD Defense Manpower Data Center database
may not reflect or provide information about the newly covered
individuals. As such, it is not clear to VA how a lender or VA would
ascertain the status of either a Servicemember who was serving in
support of a contingency operation or that of a surviving spouse of a
Servicemember.
Mr. Chairman, this concludes my statement. I would be happy to
answer any questions you or the other Members of the Subcommittee may
have. Thank you.

Prepared Statement of John K. Moran

Good Morning Chairman Stutzman, Ranking Member Braley, and
distinguished Members of the Subcommittee. Thank you for the
opportunity to testify before you today to discuss the Department of
Labor's (DOL or Department) views on pending legislation. I commend you
all for your tireless efforts to ensure that America fulfills its
obligations to our returning Service Members, Veterans, and their
families.
President Obama and Secretary Solis are committed to serving these
brave men and women as well as they have served us. In support of this
goal, the Department of Labor is working to implement a series of new
initiatives to train, transition and employ Veterans. These initiatives
are in addition to the core programs DOL has been administering for
decades, providing Veterans, transitioning Service Members and their
families with critical resources and expertise to assist and prepare
them to obtain meaningful careers, maximize their employment
opportunities, and protect their employment rights.
My name is John Moran and I am honored to serve as the Deputy
Assistant Secretary for Veterans' Employment and Training Service
(VETS) at DOL. I look forward to working with the Committee to ensure
that these men and women have the employment support, assistance and
opportunities they deserve to succeed in the civilian workforce.
This hearing is focused on four bills before the Committee: H.R.
3860, H.R. 4115, H.R. 4740, and H.R. 5747. However, I will limit my
remarks to H.R. 3860, the ``Help Veterans Return to Work Act'' and H.R.
4115, the ``Helping Iraq and Afghanistan Veterans Return to Employment
at Home Act,'' both of which would have a direct impact on the programs
administered by the Department of Labor. DOL defers to the Departments
of Veterans' Affairs (VA), Justice (DOJ) and Defense (DoD) on the
remaining pieces of legislation.
H.R. 3860--Help Veterans Return to Work Act
The Uniformed Services Employment and Reemployment Rights Act of
1994 (USERRA), prohibits discrimination against persons because of
their past, present, or future military obligations. In addition,
USERRA generally provides for prompt reemployment and full restoration
of benefits upon completion of protected service, unless the employer
can demonstrate that such employment or reemployment would impose an
undue hardship. Under current law, any employer, regardless of size can
raise the undue-hardship affirmative defense to reemploying certain
Service Members. H.R. 3860 would amend title 38 to limit the undue-
hardship affirmative defense so that it could only be claimed by small
businesses as defined under the Small Business Act.
The Department believes that H.R. 3860 would help ensure that the
undue-hardship exception is not used in ways that run counter to the
law's goals. As such, the Department supports this legislation and
looks forward to working with the Committee to protect the employment
and reemployment rights of individuals who are called to serve.

H.R. 4115--Helping Iraq and Afghanistan Veterans Return to Employment
at Home Act
H.R. 4115 would require the Secretary of Labor to establish, as a
condition of a grant or contract to carry out DVOP or LVER services,
that when the State approves or denies an application from a Veteran to
obtain: (1) a certification to be a State tested nursing assistant or a
certified nursing assistant; (2) a certification to be a registered
nurse; (3) a certification to be an emergency medical technician; or
(4) a commercial driver's license, the State takes into consideration
any training received by the Veteran while serving on active duty in
the Armed Forces.
The Department supports the intent of this legislation and looks
forward to working with the Committee to ensure that our Veterans and
transitioning Service Members have every opportunity available to
leverage their skills and training in pursuit of civilian careers. The
Department of Labor recognizes that a more focused effort on
credentialing can help lay the foundation necessary to support
Veterans' transition to civilian employment and meet the needs of
growing sectors of the civilian economy. As we invest in skills
development, we will help job seekers, including recently returning
Veterans, acquire the measurable and specific skills they need to move
along directed career pathways, and give employers access to the
skilled workers they need to compete globally.
This legislation proposes leveraging Federal funding to incentivize
states to facilitate Veterans qualifying for certain licenses and
credentials. The Department notes that to implement this legislation,
States likely would require assistance in obtaining information on the
skills possessed by Veterans separating from various military
occupations in order to be able to effectively evaluate the equivalence
of that training and experience against existing certification or
licensing requirements. In addition, the Department would need to
evaluate the adequacy of each state's effort in this area. The
Department also would also like to help ensure consistent measures
across states' efforts to ensure separating servicemembers have a
reasonable expectation of their ability to earn credentials independent
of their state of residence upon transition.
This proposed legislation is a welcome addition to current
initiatives to support credentialing and licensing for separating
servicemembers. The Department notes that the Military Credentialing
and Licensing Task Force, stood up by the President in August 2011 as
part of his comprehensive plan to lower veteran unemployment and ensure
that servicemembers leave the military career-ready, has worked with
manufacturing and credentialing agencies to expand certifications to
military personnel with skills in the high-demand fields of
engineering, logistics, machining, maintenance, and welding. Through
these partnerships, servicemembers will be able to test for and earn
civilian credentials immediately upon completing their initial military
training.
The Department is fully committed to providing a clear pathway for
Veterans to transfer the significant experience they gain in the
military towards good jobs in the civilian economy. As a result, DOL
will continue to work on initiatives to facilitate this transition
through innovative programs, and collaborative engagement with public,
private and nonprofit sector organizations that can accelerate the
licensing and certification of our Nation's Veterans.

Conclusion

Every day, we are reminded of the tremendous sacrifices made by our
servicemen and women, and by their families. One way that we can honor
those sacrifices is by providing them with the best possible services,
protections and programs our Nation has to offer.
Mr. Chairman, Ranking Member Braley, Members of the Subcommittee,
this concludes my statement. Thank you again for the opportunity to
testify today. I would be pleased to answer any questions you may have.

Prepared Statement of Frederick E. Vollrath

Chairman Stutzman, Ranking Member Braley, and members of this
distinguished Subcommittee thank you for extending the invitation to
the Department of Defense to address pending legislation that would
significantly affect our Servicemembers and Veterans: H.R. 3860, the
proposed ``Help Veterans Return to Work Act,'' H.R. 4115, the proposed
``Hire at Home Act,'' H.R. 4740, the proposed ``Fairness for Military
Homeowners Act of 2012,'' and H.R. 5747, the proposed ``Military Family
Home Protection Act.''

H.R. 3860, ``Help Veterans Return to Work Act''
H.R. 3860, would limit the availability of an undue hardship
defense under the Uniformed Services Employment and Reemployment Rights
Act (USERRA), so that it only could be claimed by small businesses. The
Department of Defense shares the goal of ensuring that the undue
hardship exception is used in ways that reinforce the law's intent.

H.R. 4115, ``Hire at Home Act''
The Department supports the intent of the legislation to encourage
the States to consider military training for purposes of civilian
credentialing. We defer to the Department of Labor as to how this bill
proposes to incentivize States. President Obama recently announced the
creation of a new Department of Defense-led Task Force charged with
finding new opportunities for Servicemembers and Veterans to use skills
they have learned in the military to gain relevant credentials,
certifications, and licenses across a broad range of civilian
occupations. This new Credentialing and Licensing Task Force is under
the leadership of the Deputy Assistant Secretary of Defense for
Readiness.
The problem of Veterans' unemployment is serious and especially
urgent for our youngest Veterans. According to the June 2012 Bureau of
Labor Statistics Current Population Survey Monthly Averages the overall
unemployment rate for post-9/11 Veterans averaged 12.7 percent. Even
more startling, the unemployment rate for the youngest post-9/11
Veterans - those aged 18 to 24 - averaged 20.2 percent.
The Department of Defense provides high-quality training to Service
members, and this high-quality training is closely linked to many of
the high-demand, high-growth occupations in the civilian sector.
Although many Veterans have acquired substantial job skills during
their time in the military, military experience does not always appear
to translate directly to the civilian labor market. In some cases, the
lack of a formal credential that demonstrates what a Veteran knows and
satisfies licensing requirements can be a barrier to obtaining civilian
employment.
The proposed legislation, H.R. 4115, conditionally requires the
States to consider a Veteran's previous military training when
approving or denying the following individual credentials:

A certification to be a State tested nursing assistant or
a certified nursing assistant.
A certification to be a registered nurse.
A certification to be an emergency medical technician.
A commercial driver's license.

The DoD Credentialing and Licensing Task Force directed by the
President will look at the occupational areas mentioned as well as
expand its focus to other high return areas. Specifically, the Task
Force will focus its initial efforts on jobs in manufacturing, health
care, information technology, logistics, and first responders--law
enforcement, firefighters, and emergency medical technicians. These
industries have an identified need for more skilled workers, and these
industries stand to benefit from Veterans' expertise and training
gained from military service.
The Task Force will: (1) identify military specialties that readily
transfer to high-demand jobs; (2) work with civilian credentialing and
licensing associations to address gaps between military training
programs and credentialing and licensing requirements; and (3) provide
servicemembers with greater access to necessary certification and
licensing exams. The Task Force effort is underway, and we look forward
to future opportunities to inform Congress of our progress and
outcomes.
The Department of Defense appreciates Congressional interest and
continued support for our Service members and Veterans. Our men and
women have done incredible work, mastered cutting-edge technologies,
and adapted to unpredictable situations. Those skills are what America
needs for the jobs and industries of the future. As President Obama
said, ``These are the kinds of Americans that every company should want
to hire.''

H.R. 4740, ``Fairness for Military Homeowners Act''
H.R. 4740, the proposed ``Fairness for Military Homeowners Act of
2012,'' would amend the SCRA to ensure that servicemembers who move
away from their principal residences for active duty are not prevented
from refinancing a mortgage on those residences. This is consistent
with the SCRA's overarching goal of ensuring that the consumer rights
of servicemembers are not unfairly limited by virtue of their military
service.
The Department supports the intent of this legislation, but notes
that it could impact loan subsidy costs. We will continue to review
this legislation and can offer technical assistance.

H.R. 5747, ``Military Family Protection Act''
The Department supports the intent of the legislation to increase
protections for Servicemembers and their families, with the following
comments.
Section a) would amend 50 USC App 533 to expand protections for
certain Servicemembers and surviving spouses, to obligations on real
property that originated at any time. This is a considerable expansion
in this area, as the SCRA's protection against nonjudicial foreclosures
applies currently only to pre-service obligations. Practically
speaking, then, this SCRA provision has traditionally offered the
mortgage-related protections against nonjudicial foreclosures primarily
to members of the Reserve Component, who are far more likely to have
mortgage obligations prior to their entry on Active Duty. The
Department supports this expansion.
The amendments in section (a) propose to provide these expanded
protections to Servicemembers serving in support of contingency
operations; to retired veterans who are totally disabled at the time of
such retirement; and to surviving spouses of Servicemembers who died
while serving in support of a contingency operation or who died while
in military service and whose death is service-connected. With respect
to the amendment provisions regarding deployed Servicemembers, it is
the Department's interpretation that the Committee intends to provide
maximum protections to current Servicemembers deployed in support of
contingency operations by making these provisions applicable to both
pre- and post-service obligations. We support this expansion but note
that the Defense Manpower Data Center (DMDC) Web site, however, cannot
provide the deployment data required as to the personnel to whom these
expanded protections would apply. It will, therefore, be incumbent upon
the financial industry, which bears the legal onus to identify such
Servicemembers, to fulfill all obligations ensuring Servicemembers
receive the appropriate protections.
With respect to the provisions regarding surviving spouses, DMDC
can, for example, identify a surviving spouse where the Servicemember
has elected the Survivor Benefit Plan (SBP) to ensure that this spouse
receives the benefits thereunder. However, DMDC cannot identify a
surviving spouse if a SBP election has not been made. Since SBP
elections are normally made only in contemplation of retirement, this
will not often be the case. The Department supports the extension of
protections to surviving spouses. It will, therefore, be incumbent upon
the financial industry, which bears the legal onus to identify such
surviving spouses, to fulfill all obligations ensuring Servicemembers
receive the appropriate protections.
Additionally, DMDC does not have the ability to identify if the
Servicemember's death is ``service-connected.'' Further, the
determination if a member dies ``in support of a contingency
operation'' is subject to interpretation. May, for example, a
Servicemember mobilized to provide ``backfill'' support in CONUS be
considered to have died in support of a contingeny operation if it is
determined that his or her death occurred in the line of duty?
Further problematic are determinations regarding veterans' status.
Disability determinations are made by the Department of Veteran's
Affairs, and we defer to the Department of Veteran's Affairs on the
feasibility on providing that information to the housing industry.
Section (f) would also amend Section 533 by providing definitions
of ``veterans,'' ``surviving spouses,'' and ``covered time periods.''
As a general rule, we believe it better, for purposes of clarity, that
all definitions be contained within section 511, but, if the drafters
determine it necessary to carve out specific types of definitions only
for these categories of personnel and that it is more appropriate for
them to be contained within the subject paragraph, we do not object. In
conclusion, the Department appreciates the Committee's desire to expand
SCRA protections, subject to the comments provided herewith.
In closing, I would just like to emphasize that taking care of our
Military before, during and after their service to our country is one
of the Department of Defense's highest priorities and we appreciate the
Subcommittee's efforts to address some of the economic challenges
Service Members and their families are facing during active duty and as
they transition into civilian life. Mr. Chairman, that concludes my
statement.

Prepared Statement of Thomas E. Perez

Chairman Stutzman, Ranking Member Braley, and Members of the
Subcommittee, thank you for holding this hearing on legislation that
will impact the rights of servicemembers. It is a privilege to present
our views about our shared priority of protecting the civil rights of
our men and women in uniform.
The Department of Justice has made enforcement of the
Servicemembers Civil Relief Act (SCRA) and the Uniformed Services
Employment and Reemployment Rights Act (USERRA) a top priority. I am
pleased to share with you today some of the recent successes we have
had in working with the Department of Defense to ensure that
servicemembers' homes and credit are protected while they serve our
Nation, and with the Department of Labor to ensure that servicemembers'
jobs are here for them when they return. Lessons from our enforcement
efforts over recent years suggest ways these laws could be amended to
better protect the rights of servicemembers, and the bills the
Subcommittee is considering today seek to do exactly that.

I. ENFORCEMENT ACCOMPLISHMENTS

(a) CRA

When servicemembers place their lives on the line to serve their
country, they should be able to focus fully on their military duties,
without having to live in fear that their homes will be wrongfully
foreclosed without their knowledge. Last year, we reached two multi-
million dollar settlements on behalf of servicemembers, including a $20
million settlement with Bank of America that is the largest SCRA
settlement the Department has ever reached.
That $20 million settlement began with a referral from the United
States Marine Corps on behalf of a servicemember deployed to Iraq. Bank
of America was scheduled to sell that servicemember's home at a
trustee's sale in three days, even though Bank of America had already
received a copy of his military orders. In the course of our
investigation and settlement negotiations, the Department found that a
total of 143 servicemembers' homes had been illegally foreclosed
between 2006 and the middle of 2009. Under the May 2011 settlement,
Bank of America will pay each victim a minimum of $116,785, plus
compensation for any lost equity. Under the consent order, Bank of
America will give the same compensation to additionally identified
servicemembers whose homes were illegally foreclosed through December
31, 2010. The Department reached a similar with Saxon Mortgage Services
that will provide 22 servicemembers with a total of $2.87 million.
Under both settlements, the banks have agreed not to pursue any
remaining amounts owed under the mortgages; to take steps to remedy
negative credit reporting; and to implement enhanced measures including
monitoring, training, and checking loans against the Defense Manpower
Data Center's SCRA database during the foreclosure process.
In February, the Nation's five largest mortgage loan servicers
(Bank of America, JPMorgan Chase & Co., Wells Fargo & Company,
Citigroup Inc., and Ally Financial Inc.) agreed to terms similar to
these two settlements as part of a broader $25 billion consent judgment
with Federal and state attorneys general. These servicers will conduct
full reviews of whether servicemembers have been illegally foreclosed
on since 2006, and each identified victim will be compensated a minimum
of $116,785, plus any lost equity with interest. All five servicers
agreed to put in place better policies, procedures, and employee
training to ensure full compliance with the SCRA.
As a result of these 2011 and 2012 settlements, the vast majority
of all foreclosures since 2006 will now be subject to court-ordered
review to determine whether the SCRA rights of servicemembers were
violated.

(b) USERRA

The Civil Rights Division has also been vigilant in protecting
servicemembers' employment rights under USERRA. Servicemembers should
be able to serve their country without running the risk of losing their
jobs back home. To date, the Division has filed a total of 75 cases
under USERRA, 42 of which have been filed during the current
Administration. One such case involved Matthew King, a U.S. Army Guard
member and Iraq War veteran, who was terminated from his job at Lowe's.
In November 2011, the national hardware-store chain agreed to settle
the Division's claims alleging that this termination violated USERRA,
and King received $45,000 for back pay and liquidated damages.
In another case, the Division went to trial and secured back pay
and injunctive relief against the Alabama Department of Mental Health
for failure to promptly reemploy a servicemember upon his return from
active duty in Iraq. On appeal in this case, the Division successfully
defended the first Eleventh Amendment challenge to USERRA.

These efforts would not be possible without our strong
collaboration with the military community. The Department of Defense
has provided critical assistance in identifying servicemembers whose
rights were violated, and they have been a critical partner in our SCRA
enforcement efforts. We have also worked to reach out to servicemembers
directly. This past September, I joined the U.S. Attorney for the
Western District of Kentucky, David Hale, and met with some 100
servicemembers at the Fort Knox military installation, including
several from the Warriors in Transition Unit, to discuss the civil-
rights protections we enforce on their behalf. This outreach continues.
Last month, I joined with U.S. Attorneys David Hale of Kentucky and
Jerry Martin of Tennessee and met with approximately 200 servicemembers
of the 101st Airborne Division at Fort Campbell, which straddles the
border of those two states.

II. COMMENTS ON PENDING LEGISLATION
Through our enforcement work, we have achieved great successes on
behalf of servicemembers, but we have also identified ways that the
SCRA and USERRA could be strengthened to better protect the rights of
servicemembers. In September 2011, the Department formally transmitted
to Congress a package of proposals for strengthening these laws, and we
are eager to work with the Committee on many of the issues you are
confronting in these bills. We were pleased when Senator Patty Murray
included many of our proposals in S. 2299, the ``Servicemembers Rights
Enforcement Improvement Act.'' The Department would welcome the
introduction of a companion bill by the leaders of this Committee as
well.

(a) CRA

H.R. 5747, the proposed ``Military Family Home Protection Act,''
would amend the SCRA to double civil penalties for violations of
section 303 of the Act, to $110,000 for a first violation and $220,000
for subsequent violations. We support this change, and strongly urge
the Committee to also include in this bill a provision that would
double civil penalties for all violations of the Act. As you know, when
Congress amended the SCRA to provide for civil penalties in 2010, it
used the amounts authorized under the Fair Housing Amendments Act.
These amounts, however, have not been adjusted for inflation, or for
any other reason, since 1999. The Department believes that other
violations of the law deserve the same heightened level of deterrence
and remedy. This bill seeks to strengthen SCRA protections in a number
of other important areas. We will continue to review these provisions
and can offer technical assistance.
H.R. 4740, the proposed ``Fairness for Military Homeowners Act of
2012,'' would amend the SCRA to ensure that servicemembers who move
away from their principal residences for active duty are not prevented
from refinancing a mortgage on those residences. This is consistent
with the SCRA's overarching goal of ensuring that the consumer rights
of servicemembers are not unfairly limited by virtue of their military
service. We will continue to review this legislation and can offer
technical assistance.
In addition to the amendments proposed by H.R. 5747 and H.R. 4740,
we urge the Committee to amend the SCRA's affidavit requirement, which
provides that a party seeking foreclosure or other default judgment
against a servicemember must first file with the court an affidavit
stating whether or not the servicemember is in military service, to
clarify that such requirement includes the obligation to take
reasonable steps to determine the servicemember's military status. Such
steps would include, but are not limited to, searching available
Department of Defense records. The amendment would simply codify what
several courts have already held. We also urge the Committee to amend
the SCRA to clarify that the private right of action and the Attorney
General's authority to enforce the SCRA, which were made explicit in
the Veterans' Benefits Act of 2010, apply retroactively to violations
occurring before the date of enactment of that Act. This would be
consistent with the Department's litigating position and with the
recent decisions of the Fourth Circuit Court of Appeals, and would
ensure that the SCRA rights of all servicemembers can be vindicated.

(b) USERRA

H.R. 3860, the proposed ``Help Veterans Return to Work Act,'' would
amend USERRA to limit the undue-hardship affirmative defense to
reemploying certain servicemembers so that it could only be claimed by
small businesses. We share the goal of ensuring that the undue-hardship
exception is not used in ways that run counter to the law's goals.
H.R. 4115, the proposed ``Helping Iraq and Afghanistan Veterans
Return to Employment at Home Act,'' is outside of our jurisdiction, and
we defer to the Department of Labor on this legislation.
In addition to the amendment proposed by H.R. 3860, we strongly
urge the Committee to amend USERRA to grant the Attorney General
independent authority to investigate and file suit to challenge
employment policies or practices that establish a pattern or practice
of violating USERRA. This change would make USERRA operate more like
the SCRA and other civil-rights laws by allowing the United States to
always serve as the plaintiff in USERRA cases, to vindicate the public
interest in ensuring the statute is enforced. This would significantly
strengthen the Department's ability to address systemic violations of
servicemembers' employment rights (such as a policy prohibiting
extended absences, including absences for military service) that could
adversely affect the employment rights of multiple servicemembers.

Finally, the Department urges the Committee to amend both the SCRA
and USERRA to provide the Attorney General with civil investigative
demand (CID) authority. While the Department of Labor has subpoena
power in its USERRA investigations, the Department of Justice has no
pre-suit investigative authority under USERRA or the SCRA, and must
rely on voluntary cooperation from the subjects of our investigations.
Greater investigative authority would strengthen the Department's
ability to enforce both statutes, especially through pattern-or-
practice suits.
III. LOOKING FORWARD
The Department appreciates the opportunity to report on our
accomplishments in enforcing the SCRA and USERRA, and to comment on the
legislation the Subcommittee is considering today. We stand ready to
work with the Subcommittee in strengthening these important laws that
protect the rights of our servicemembers.
Thank you for the opportunity to share our views.

Materials Submitted For The Record

LETTERS OF SUPPORT FOR THE RECORD
The
American
Legion

May 14,2012

Honorable Elijah E. Cummings
U.S. House of Representatives
2235 Rayburn House Office Building
Washington, DC 20515

Dear Representative Cummings:

On behalf of the 2.4 million members of The American Legion, I am
writing this letter in support of your efforts to amend the
Servicemembers Civil Relief Act (SCRA). Our servicemembers should be
afforded every protection and right possible when deployed in service
to our nation. These safeguards should be in place regardless of their
status as an active duty member and they should extend to their
families in situations of serious injury or death.

Your proposed amendment to the 2013 National Defense Authorization
Act would codify these protections. It would protect servicemembers
deployed in support of contingency operations from home foreclosures,
regardless of when the home was purchased. It would expand the civil
penalties levied against unscrupulous lenders to better reflect the
seriousness of violations against SCRA. Finally it would expand the 12-
month stay against foreclosures for servicemembers discharged with a
100% disability rating and it would offer a similar stay for surviving
spouses.

When originally enacted, SCRA was a bipartisan effort to guarantee
our nation, citizens and corporations alike took care of the family and
servicemember when he or she deployed. It didn't perfectly meet the
requirements and reality oftoday's military members. We appreciate your
efforts to dramatically improve SCRA and better assist those in our
Nation willing to serve.

If we can be of further assistance, please don't hesitate to let us
know.

National Commander

VETERANS OF FOREIGN WARS OF THE UNITED STATES
May 15,2012

The Honorable Elijah Cummings
Ranking Member
Committee on Oversight and Government Reform
U.S. House of Representatives
2471 Rayburn House Building
Washington, D.C. 20515

Dear Ranking Member Cummings:

On behalf of the 2 million men and women of the Veterans of Foreign
Wars of the United States (VFW) and our Auxiliaries, I am pleased to
offer our support to your Amendment to the National Defense
Authorization Act of2013 that would provide greater protections and
expand coverage of the Servicemembers Civil Relief Act.

In a time of war, and when a large portion of our fighting force is
being drawn from the National Guard and reserves, every protection must
be taken to ensure their lives are not further complicated by financial
worries while they are deployed and once they return home. Your
proposal goes a long way in protecting the homes of our Guard and
reserve members, veterans and their surviving spouses. By lengthening
the time our servicemembers have to get their financial affairs in
order and by placing real punitive deterrents on lenders, our veterans
can have one less thing to worry about while reintegrating from war.

Thank you for continuing to take the lead on this initiative, and
for your continued support of our armed forces and veterans. We look
forward to working with you to advance this critical initiative.

Sincerely,

Raymond C. Kelley, Director
VFW National Legislative Service

DISABLED AMERICAN VETERANS
May 14, 2012

The Honorable Elijah Cummings
United States House of Representatives
2235 Rayburn House Office Building
Washington, DC 20515

Dear Representative Cummings:

I am writing on behalf of the Disabled American Veterans (DAV), a
congressionally chartered national veterans service organization with
1.2 million members, all of whom were disabled as a result of active
duty in the United States Armed Forces. The DAV works to build better
lives for America's disabled veterans, their families and survivors.

We have reviewed your proposed bill, which amends the
Servicemembers Civil Relief Act to extend from the current grace period
to twelve months after military service to protect covered
servicemembers and their surviving spouses, as well as veterans rated
totally disabled by the Department of Veterans Affairs (VA) at time of
military retirement, against mortgage sale or foreclosure, as well as
the stay of proceedings, in the case of an obligation on real property
that originated before the servicemember's military service.

While we do not have a resolution on this specific matter from our
members, we support its general purpose, as it would extend the period
of protection for servicemembers against mortgage sale or foreclosure.
However, we believe that section 1(f)(1)(B) of the bill is extremely
restrictive in requiring a VA disability rating of 100 percent at the
time of retirement.

Thank you again for introducing this important legislation. I look
forward to working with you and your staff to continue the DAV mission
of building better lives for America's disabled veterans and their
families.

Sincerely

JOSEPH A. VIOLANTE
National Legislative Director

JAV:lmb
c:Representative Bob Filner, Ranking Member, House Veterans'
Affairs Committee
Representative David Dreier, Chairman, House Rules
Committee
Representative Louise Slaughter, Ranking Member, House
Rules Committee

PARALYZED VETERANS OF AMERICA
May 9, 2012

Honorable Elijah E. Cummings
U.S. House of Representatives
2235 Rayburn House Office Building
Washington, D.C. 20515

Dear Congressman Cummings:

On behalf of Paralyzed Veterans of America (PVA), a Congressionally
Chartered veterans' service organization that represents veterans with
spinal cord injuries and diseases, I am writing to express our support
for your legislation that would make needed reform in the
Servicemembers Civil Relief Act (SCRA).

SCRA provides certain protection for servicemembers against sale,
foreclosure, and seizure of property when those servicemembers are
unable to meet the financial obligation on real or personal property.
To expand this protection offered under SCRA the House recently passed
H.R. 1263. This legislation would offer the same protection to the
spouse of a servicemember who died while in the military and whose
death is service-connected. This protection offered in H.R. 1263 is of
significant importance to protect the home of the deceased
servicemember where the spouse and children may reside.

Your proposed legislation will expand the protection of SCRA to
include servicemembers who are seriously injured while serving in the
military. Their homes should also have the same protection from
foreclosure. It will extend the period of protection from mortgage
foreclosure to 12 months after the veteran leaves the service. It also
requires lending institutions to establish a toll free phone number for
the servicemember to discuss their lending program.

Your proposed legislation is a strong example of the concern you
have displayed for veterans and those serving in the military. We look
forward to working with you on this legislation, or other legislation
that benefits our servicemembers and our veterans.

Sincerely,

Carl Blake
National Legislative Director
Paralyzed Veterans of America

MOAA
Military Officers Association of America
VADM Norbert R. Ryan, Jr. USN (Ret)
President

June 6,2012

The Honorable Elijah Cummings
United States House of Representatives
Washington, DC 20515

Dear Congressman Cummings:

On behalf of the over 370,000 members of the Military Officers
Association of America (MOAA), I am writing to express our support for
your amendment in H.R. 4130, the House-passed version of the FY 2013
National Defense Authorization Act (NOAA), which would expand
protections under the Servicemembers Civil Relief Act (SCRA).

Your provision, one that passed with overwhelmingly bi-partisan
support in the House, would provide significant foreclosure protections
for servicemembers who own homes and are sent into harm's way,
regardless of when they purchased their home.

Our young men and women in uniform who are deployed to contingency
operations will be able to focus on the mission at hand and not have to
worry if their family remaining at home will be able to keep a roof
over their head.

Fortunately your provision does not stop there. It extends
protections to two other deserving groups who are forced to deal with
life-altering changes- survivors and 100% disabled veterans.

Thank you for your leadership, for continuing to look out after the
interests of our Nation's servicemembers and their families, and for
sponsoring this important amendment - we pledge our strong support and
look forward to its inclusion in the FY 2013 NOAA.

Sincerely, & Best

Materials Submitted For The Record

REPORT ON: FIGHTING ON THE HOME FRONT: THE GROWING PROBLEM OF ILLEGAL
FORECLOSURES AGAINST U.S. SERVICEMEMBERS
Democratic Staff Report
Prepared for:

Senator John D. (Jay) Rockefeller IV
Chairman
Committee on Commerce, Science, and Transportation
United States Senate
http://commerce.senate.gov/public/

Representative Elijah E. Cummings
Ranking Member
Committee on Oversight and Government Reform
United States House of Representatives
http://democrats.oversight.house.gov/

July 12, 2011

TABLE OF CONTENTS [From The Original Report]

Executive Summary
........................................................................
..............................3

I. Overview of Servicemembers Civil Relief Act (SCRA)
........................................5

II. Widespread and Increasing Violations of the SCRA
........................................6

A. JPMorgan Chase
........................................................................
.......................6

B. Bank of America (Countrywide)
.....................................................................7

C. Morgan Stanley (Saxon Mortgage Services, Deutsche Bank)
....................8

III. Interagency Findings of Illegal Actions and ``Elevated''
Concern ....................9

IV. Actions by CFPB and Military JAGs
..............................................................10

V. Servicemember Case Studies
........................................................................
.....12

A. Army National Guard Warrant Officer Charles Pickett
..............................12

B. Army Captain Kenneth Gonzales
..................................................................14

VI. Efforts by Ranking Member Cummings to Investigate
...............................16

Executive Summary
In the midst of World War II, Congress enacted the Soldiers' and
Sailors' Civil Relief Act ``to protect those who have been obliged to
drop their own affairs to take up the burdens of the nation.'' In 2003,
Congress passed the Servicemembers Civil Relief Act (SCRA) to update
the law and provide additional protections for servicemembers. In 2010,
Congress enacted amendments to the SCRA specifically relating to
mortgages and foreclosures.
The SCRA prohibits foreclosures against servicemembers without
court orders and restricts mortgage banks from charging interest fees
above 6% during active duty service.
When isolated reports of illegal foreclosures and inflated fees
against servicemembers first arose, mortgage servicing companies
downplayed the extent of these problems. As thousands of servicemembers
began coming forward, however, the widespread scope of these problems
became more evident.
Multiple mortgage servicing companies have now conceded that they
violated the SCRA by illegally foreclosing on servicemembers and by
charging fees in excess of the maximum amounts allowed under the SCRA.
Three banks have been forced to pay multi-million dollar settlements
relating to these abuses. The largest to date was JPMorgan, which
initially announced that it would pay $2 million, but later agreed to
pay $56 million to settle claims that it overcharged military personnel
and illegally seized the homes of active-duty military personnel
protected by the SCRA.
Similarly, in announcing a $20 million settlement against Bank of
America, Justice Department officials condemned the bank's actions,
stating that it ``failed to protect and respect the rights of our
servicemembers, failed to comply with clearly mandated procedures, and
foreclosed against homeowners who are valiantly serving our nation.''
The scale of these problems continued to expand, however, as
Federal regulators dug deeper. On April 13, four Federal agencies that
regulate mortgage servicing companies issued a report finding
``critical weaknesses in servicers' foreclosure governance processes,
foreclosure document preparation processes, and oversight and
monitoring of third-party vendors, including foreclosure attorneys.''
The report raised ``escalated'' concerns about the systemic
deficiencies of 14 mortgage banks, including multiple SCRA violations.
This interagency review was cursory, however, and was based on only
a sampling of a ``relatively small number of files.'' As a result, the
agencies initiated enforcement action against all 14 banks, directing a
more comprehensive review to identify additional borrowers and
servicemembers ``that have been financially harmed.''
In addition, the Dodd-Frank Wall Street Reform and Consumer
Protection Act established the Consumer Financial Protection Bureau
(CFPB) to protect consumers from unfair, deceptive, and abusive
financial practices. Under the leadership of Elizabeth Warren, the CFPB
organized an Enforcement Division and an Office of Servicemember
Affairs led by Holly Petraeus, the wife of Gen. David H. Petraeus, the
former top U.S. commander in Afghanistan.
Mrs. Petraeus focused quickly on the issue of SCRA violations,
making public statements to increase awareness and issuing warning
letters to the nation's largest 25 mortgage banks. In addition, on July
6, 2011, she announced that the CFPB and the Judge Advocates General of
the United States Army, Marine Corps, Navy, Air Force, and Coast Guard
agreed to a number of steps ``to provide stronger protections for
servicemembers and their families.'' In particular, they established
``a formal working group with the goal of achieving a coordinated
response to unlawful conduct targeted at servicemembers and their
families.''
Although it is now clear that illegal actions against
servicemembers are much more widespread than originally believed, their
full scope is not yet known. Violations of the SCRA have taken a
significant toll on servicemembers who have had to wage battles on two
fronts-- risking their lives in service of their country abroad while
fighting illegal foreclosures and inflated fees at home.
I. OVERVIEW OF SERVICEMEMBERS CIVIL RELIEF ACT (SCRA)
In 1940, Congress enacted the Soldiers' and Sailors' Civil Relief
Act ``to protect those who have been obliged to drop their own affairs
to take up the burdens of the nation.'' In 2003, Congress passed the
Servicemembers Civil Relief Act (SCRA) to update the law and provide
additional protections for servicemembers. \1\ In 2010, Congress
enacted additional provisions creating a private right of action and
extending certain protections regarding mortgages and foreclosures. \2\
---------------------------------------------------------------------------
\1\ Pub. L. No. 108-189 (2003).
\2\ See Pub. L. No. 111-346 (2010); Pub. L. No. 111-275 (2010).
---------------------------------------------------------------------------
When the SCRA was passed in 2003 with broad bipartisan support, a
report by the House Committee on Veterans' Affairs stated:

Congress has long recognized that the men and women of our military
services should have civil legal protections so they can ``devote their
entire energy to the defense needs of the Nation.'' With hundreds of
thousands of servicemembers fighting in the war on terrorism and the
war in Iraq, many of them mobilized from the reserve components, the
Committee believes the Soldiers' and Sailors' Civil Relief Act (SSCRA)
should be restated and strengthened to ensure that its protections meet
their needs in the 21st century. \3\
---------------------------------------------------------------------------
\3\ House Committee on Veterans' Affairs, Servicemembers Civil
Relief Act, 108th Cong. (2003) (H. Rept. 108-81).
---------------------------------------------------------------------------
The purpose of the SCRA is to ``provide for, strengthen, and
expedite the national defense'' through the ``temporary suspension of
judicial and administrative proceedings and transactions that may
adversely affect the civil rights of servicemembers during their
military service.'' The Act addresses a host of proceedings, including
those affecting motor vehicle leases, life insurance, and mortgages.
\4\
---------------------------------------------------------------------------
\4\ See Pub. L. No. 108-189 (2003).
---------------------------------------------------------------------------
The SCRA protects active duty servicemembers against foreclosures
during their period of military service. It states:
A sale, foreclosure, or seizure of property for a breach of an
obligation ... shall not be valid if made during, or within 9 months
after, the period of the servicemember's military service except ...
upon a court order granted before such sale, foreclosure, or seizure
with a return made and approved by the court. \5\
---------------------------------------------------------------------------
\5\ 5 50 U.S.C. app. Sec. 533(c).
---------------------------------------------------------------------------
The SCRA also provides courts with broad authority to ``stay the
proceedings for a period of time as justice and equity require'' and to
``adjust the obligation to preserve the interests of all parties.'' \6\
Finally, the SCRA provides that mortgage interest rates for
servicemembers may not exceed 6% for pre-service debt during the period
of military service and for one year after termination of service. \7\
---------------------------------------------------------------------------
\6\ Id. at Sec. 533(b).
\7\ Id. at Sec. 527.
---------------------------------------------------------------------------
II. WIDESPREAD AND INCREASING VIOLATIONS OF THE SCRA
Multiple mortgage servicing companies have now conceded that they
violated the SCRA by illegally foreclosing on servicemembers and by
charging fees in excess of the maximum amounts allowed under the SCRA.
Although initially downplaying the extent of the problem, several banks
have been forced to pay multi-million dollar settlements relating to
these violations.

A. JPMorgan Chase

In January 2011, JPMorgan admitted publicly that it overcharged
thousands of military families in violation of the SCRA. One of these
servicemembers was Marine Captain Jonathon Rowles, a fighter pilot who
sued the bank for overcharging his family and illegally attempting to
seize his home. Captain Rowles' case identified systematic failures in
JPMorgan's SCRA procedures, resulting in illegal foreclosures, improper
fees, and negative credit actions against servicemembers. \8\
---------------------------------------------------------------------------
\8\ JP Morgan Overcharged Troops on Mortgages, NBC News (Jan. 17,
2011) (online at www.nbcnewyork.com/news/breaking/No--2--bank--
overcharged--troops--on--mortgages-113875324.html). See also
Overcharges on Soldiers' Mortgages Investigated, NBC News (Jan. 26,
2011) (online at today.msnbc.msn.com/id/41043127/ns/today-money/t/
overcharges-soldiers-mortgages-investigated/).
---------------------------------------------------------------------------
Initially, JPMorgan announced that it would pay $2 million to
approximately 4,500 servicemembers. \9\ But within three months--by
April 2011--JPMorgan conceded that its abuses were much worse. Instead
of paying only $2 million, the company agreed to pay $56 million to
settle claims that it overcharged military personnel and illegally
seized the homes of active-duty military personnel protected by the
SCRA. \10\
---------------------------------------------------------------------------
\9\ JPMorgan Mails $2 Million to Military Families for Overcharges,
Lost Homes, Bloomberg (Jan. 18, 2011) (online at www.bloomberg.com/
news/2011-01-18/jpmorgan-mails-2-million-to-military-families-for-
overcharges-lost-homes.html).
\10\ JPMorgan Settles Military Mortgage Suits for $56 Million,
Bloomberg (Apr. 21, 2011) (online at www.businessweek.com/news/2011-04-
21/jpmorgan-settles-military-mortgage-suits- for-56-million.html).
---------------------------------------------------------------------------
Last month, JPMorgan ousted David Lowman, the mortgage chief who
ran the company's home-lending unit since 2006. \11\ JPMorgan CEO Jamie
Dimon stated that this was the worst mistake the bank has ever made. At
the company's May 17 annual shareholder meeting, he stated: ``We deeply
apologize to the military, the veterans, anyone who's ever served this
country. ... We're sorry.'' \12\
---------------------------------------------------------------------------
\11\ JPMorgan Ousts Home-Lending Chief After Foreclosure Lapses,
Bloomberg (June 14, 2011) (online at www.businessweek.com/news/2011-06-
14/jpmorgan-ousts-home-lending-chief- after-foreclosure-lapses.html).
\12\ Id.

---------------------------------------------------------------------------
B. Bank of America (Countrywide)

In May 2011, the Department of Justice announced that Bank of
America Home Loan Servicing, formerly known as Countrywide Home Loans
Servicing, would pay $20 million for hundreds of SCRA violations. The
Department determined that the bank ``foreclosed on approximately 160
servicemembers between January 2006 and May 2009 without court
orders.'' In addition to paying $20 million for violations during this
time period, the bank must also compensate servicemembers wrongfully
foreclosed on from June 2009 through 2010. \13\
---------------------------------------------------------------------------
\13\ Department of Justice, Justice Department Settles with Bank of
America and Saxon Mortgage for Illegally Foreclosing on Servicemembers
(May 26, 2011) (online at www.justice.gov/opa/pr/2011/May/11-crt-
683.html).
---------------------------------------------------------------------------
In announcing the settlement, Andre Birotte, the U.S. Attorney for
the Central District of California, condemned the bank's violations:

Countrywide Home Loans failed to protect and respect the rights of
our servicemembers, failed to comply with clearly mandated procedures
and foreclosed against homeowners who are valiantly serving our nation.
Military families lost their homes when Countrywide violated the law,
causing undue stress to wartime personnel. \14\
---------------------------------------------------------------------------
\14\ Id.

James Jacks, the U.S. Attorney for the Northern District of Texas,
---------------------------------------------------------------------------
was also critical:

With the numerous sacrifices our servicemembers make while they are
serving our country, the last thing they need to worry about is whether
or not their families will be forced from their homes. These lenders'
callous disregard for the SCRA, a law which was designed to insulate
these patriots from unlawful foreclosures and other civil and financial
obligations while they are on active duty, is deplorable. \15\
---------------------------------------------------------------------------
\15\ Id.
---------------------------------------------------------------------------
According to the Department, the bank foreclosed on servicemembers
in many instances ``where it knew, or should have known, about their
military status,'' and the ``victims include individuals who have
served honorably in Iraq and Afghanistan.'' The settlement requires
SCRA training for bank employees and agents, referrals of future SCRA
complaints to the Justice Department, and repairs to negative credit
reports related to wrongful foreclosures. \16\
---------------------------------------------------------------------------
\16\ Id.
---------------------------------------------------------------------------
Bank of America Executive Vice President Terry Laughlin stated:
``While most cases involve loans originated by Countrywide and the
improper foreclosures were taken or started by Countrywide prior to our
acquisition, it is our responsibility to make things right. These
errors are not acceptable, and we certainly regret them.'' \17\
---------------------------------------------------------------------------
\17\ Mortgage Servicing Means Occasionally Having to Say You're
Sorry, American Banker (May 27, 2011) (online at
www.americanbanker.com/bankthink/mortgage-servicing-1038149-1.html).

---------------------------------------------------------------------------
C. Morgan Stanley (Saxon Mortgage Services, Deutsche Bank)

In March 2009, a Federal judge ruled that National Guard Sergeant
James Hurley, who was called to active duty in Iraq in 2004, was
illegally foreclosed on in violation of the SCRA by a Morgan Stanley
subsidiary, Saxon Mortgage Services, and Deutsche Bank Trust Company.
The foreclosure forced Sergeant Hurley's wife and two young children to
find shelter elsewhere while he was deployed overseas. \18\
---------------------------------------------------------------------------
\18\ A Reservist in a New War, Against Foreclosure, New York Times
(Jan. 26, 2011) (online at www.nytimes.com/2011/01/27/business/
27foreclose.html).
---------------------------------------------------------------------------
Despite the court ruling, it took Sergeant Hurley two years in
continued litigation to settle his claims because the banks refused to
pay any damages other than the sale value of the home, which was less
than the mortgage Sergeant Hurley owed. The banks completed the
foreclosure without the court hearing required by the SCRA, claiming
there was no evidence Sergeant Hurley was on military duty. Yet the
banks admitted in a court filing that one of their foreclosure
attorneys ``learned in April 2005 that Sergeant Hurley had been on
active duty since the previous October.'' \19\
---------------------------------------------------------------------------
\19\ Id.
---------------------------------------------------------------------------
In March 2011, the Department of Justice announced that it was
investigating these and other illegal activities by Morgan Stanley and
its subsidiary. The bank's attorneys attempted to downplay the
investigation, stating that it was ``merely a preliminary investigation
based on unproven allegations, for which no liability or wrongdoing has
been found.'' \20\
---------------------------------------------------------------------------
\20\ U.S. Inquiry on Military Family Foreclosures, New York Times
(Mar. 11, 2011) (online at www.nytimes.com/2011/03/12/business/
12military.html).
---------------------------------------------------------------------------
Nevertheless, two months later, the Department of Justice announced
that the bank would pay $2.35 million to settle multiple claims of
violations of the SCRA. The Department stated that, in addition to
Sergeant Hurley's illegal foreclosure, the banks foreclosed on other
servicemembers when they ``knew or should have known about their
military status,'' including ``men and women who have served honorably
in Iraq, some of whom were severely injured in the line of duty.'' \21\
---------------------------------------------------------------------------
\21\ Department of Justice, Justice Department Settles with Bank of
America and Saxon Mortgage for Illegally Foreclosing on Servicemembers
(May 26, 2011) (online at www.justice.gov/opa/pr/2011/May/11-crt-
683.html).
---------------------------------------------------------------------------
Following the settlement, Morgan Stanley issued the following
statement: ``We want to apologize to those military families that were
affected by any mistakes made in the foreclosure process.'' \22\
---------------------------------------------------------------------------
\22\ Mortgage Servicing Means Occasionally Having to Say You're
Sorry, American Banker (May 27, 2011) (online at
www.americanbanker.com/bankthink/mortgage-servicing-1038149-1.html).

III. INTERAGENCY FINDINGS OF ILLEGAL ACTIONS AND ``ELEVATED'' CONCERN
In addition to reports about specific servicemembers and banks
described above, an analysis by Federal regulators raises a host of new
concerns about the full scope of these abuses. On April 13, 2011, four
agencies that regulate mortgage servicing companies--the Office of the
Comptroller of the Currency, the Federal Reserve System, the Office of
Thrift Supervision, and the Federal Deposit Insurance Corporation--
issued a report finding widespread foreclosure abuses by 14 mortgage
servicing companies, including multiple SCRA violations.
The report found ``critical weaknesses in servicers' foreclosure
governance processes, foreclosure document preparation processes, and
oversight and monitoring of third-party vendors, including foreclosure
attorneys.'' \23\
---------------------------------------------------------------------------
\23\ Federal Reserve System, Office of the Comptroller of the
Currency, and Office of Thrift Supervision, Interagency Review of
Foreclosure Policies and Practices (Apr. 13, 2011) (online at
www.occ.treas.gov/news-issuances/news-releases/2011/nr-occ-2011-
47a.pdf).
---------------------------------------------------------------------------
The report also found violations of law that elevated the agencies'
level of concern across the board. The report stated:

[T]he weaknesses at each servicer, individually or collectively,
resulted in unsafe and unsound practices and violations of applicable
Federal and state law and requirements. The results elevated the
agencies' concern that widespread risks may be presented--to consumers,
communities, various market participants, and the overall mortgage
market. The servicers included in this review represent more than two-
thirds of the servicing market. Thus, the agencies consider problems
cited within this report to have widespread consequences for the
national housing market and borrowers. \24\
---------------------------------------------------------------------------
\24\ Id.
---------------------------------------------------------------------------
With respect to servicemembers in particular, the report found
``cases in which foreclosures should not have proceeded,'' including
against borrowers who were ``covered by the Servicemembers Civil Relief
Act.'' \25\
---------------------------------------------------------------------------
\25\ Id.
---------------------------------------------------------------------------
This review was based on only a sampling of a ``relatively small
number of files.'' To address the widespread abuses identified in this
cursory review, the agencies initiated enforcement action against all
14 banks, directing a comprehensive review of all files of affected
homeowners ``to identify borrowers that have been financially harmed
and provide remediation.'' \26\
---------------------------------------------------------------------------
\26\ Id.
---------------------------------------------------------------------------
IV. ACTIONS BY CFPB AND MILITARY JAGs
The Dodd-Frank Wall Street Reform and Consumer Protection Act
established the Consumer Financial Protection Bureau (CFPB) to protect
consumers from unfair, deceptive, and abusive financial practices. \27\
Under the leadership of Elizabeth Warren, the CFPB organized an
Enforcement Division and an Office of Servicemember Affairs dedicated
to protecting the rights of servicemembers and their families.
---------------------------------------------------------------------------
\27\ Pub. L. No. 11-203 (2010).
---------------------------------------------------------------------------
On January 4, 2011, Ms. Warren announced that Holly Petraeus would
lead the Office of Servicemember Affairs. As the wife of General David
H. Petraeus, the former top U.S. commander in Afghanistan, and the
daughter of a career Army officer, Mrs. Petraeus previously served as
the Director of BBB Military Line, a program that assisted military
families on consumer issues. \28\
---------------------------------------------------------------------------
\28\ Holly Petraeus Will Lead Consumer Financial Protection
Bureau's Office for Service Member Affairs, Washington Post (Jan. 4,
2011) (online at www.washingtonpost.com/wp-dyn/content/article/2011/01/
04/AR2011010405627.html).
---------------------------------------------------------------------------
After she was appointed, Mrs. Petraeus focused quickly on the issue
of SCRA violations. In one of her first public statements in her new
role, she spoke directly about the severe repercussions these
violations have on servicemembers and their families. She stated:

It can be devastating. It is a terrible situation for the family at
home and for the servicemember abroad, who feels helpless. I would hope
that the recent problems will be a wake-up call for all banks to review
their policies and be sure they comply with the act. \29\
---------------------------------------------------------------------------
\29\ A Reservist in a New War, Against Foreclosure, New York Times
(Jan. 26, 2011) (online at www.nytimes.com/2011/01/27/business/
27foreclose.html).
---------------------------------------------------------------------------
Within days, Mrs. Petraeus sent warning letters to the nation's 25
top mortgage servicing companies, directing them ``to take steps to
educate all your employees about the financial protections that the
SCRA provides and to review your loan files to ensure compliance.''
\30\
---------------------------------------------------------------------------
\30\ See, e.g., Letter from Holly Petraeus, Team Lead, Office of
Servicemember Affairs, Consumer Financial Protection Bureau, to Brian
T. Moynihan, CEO and President, Bank of America Corporation (Feb. 1,
2011).
---------------------------------------------------------------------------
In addition, last week, on July 6, 2011, Mrs. Petraeus announced
that the CFPB and the Judge Advocates General of the United States
Army, Marine Corps, Navy, Air Force, and Coast Guard agreed to a number
of steps ``to provide stronger protections for servicemembers and their
families.'' \31\
---------------------------------------------------------------------------
\31\ Consumer Financial Protection Bureau, Consumer Financial
Protection Bureau and Military's Top Uniformed Lawyers Release Joint
Statement of Principles (July 6, 2011) (online at
www.consumerfinance.gov/pressrelease/consumer-financial-protection-
bureau-and-militarys-top-uniformed-lawyers-release-joint-statement-of-
principles/).

[GRAPHIC] [TIFF OMITTED] T5613.001

For example, they agreed to establish ``a single point of contact
within the CFPB's Enforcement Division that will allow members of the
Judge Advocate Generals' Corps to share information on consumer
complaints from servicemembers and military families.'' They also
agreed to establish ``a formal working group with the goal of achieving
a coordinated response to unlawful conduct targeted at servicemembers
and their families.'' \32\
---------------------------------------------------------------------------
\32\ Id.
---------------------------------------------------------------------------
The top goal of this joint effort by CFPB and the nation's top
uniformed lawyers is to protect servicemembers and their families
``from unlawful acts or practices by providers of consumer financial
products or services, including through enforcement actions where
necessary.'' \33\ In her statement announcing these steps, Mrs.
Petraeus warned about the predatory practices of mortgage servicing
companies:
---------------------------------------------------------------------------
\33\ Id.

I have worked for years trying to protect military families from
predatory practices and to help raise awareness of the unique financial
challenges they face--and I know the Judge Advocate Generals have been
on the front lines in each of those fights. Servicemembers and their
families sacrifice a great deal for our country and they deserve
advocates who will use every available resource to protect them from
financial threats. \34\
---------------------------------------------------------------------------
\34\ Id.
---------------------------------------------------------------------------
A joint statement issued by the Judge Advocates General also warned
about the predatory abuses by mortgage servicing companies:

Too often our Soldiers, Marines, Sailors, Airmen, and Coast
Guardsmen are targeted by predatory lenders and they become victims of
unfair financial practices. This agreement recognizes the crucial role
financial readiness plays in mission readiness and we look forward to
partnering with the Consumer Financial Protection Bureau to vigorously
protect servicemembers and their families from unlawful acts or
practices by providers of consumer financial products or services. \35\
---------------------------------------------------------------------------
\35\ Id.
---------------------------------------------------------------------------
V. SERVICEMEMBER CASE STUDIES

A. Army National Guard Warrant Officer Charles Pickett

Chief Warrant Officer 3 Charles L. Pickett is a helicopter pilot in
the Army National Guard who lives in Anthem, Arizona, with his two
daughters. From 2009 to 2011, while he was on active duty, Bank of
America attempted to foreclose on his home on three separate occasions
in violation of the Servicemembers Civil Relief Act (SCRA). Attempting
to prevent the foreclosure in the midst of his deployment to Iraq,
Warrant Officer Pickett hired an attorney, Colonel John Odom. Although
they were ultimately successful in halting the foreclosures, Bank of
America's actions resulted in damage to Warrant Officer Pickett's
credit, a cancelation of his credit line with USAA, and unnecessary
stress while he was serving his country on the battlefield.

Timeline

August 6, 2003: Mr. Pickett purchased a home with a mortgage from
Countrywide Mortgage Loans (Bank of America acquired Countrywide in
July 2008).
November 2003-October 2008: Mr. Pickett joined the Arizona National
Guard as a Warrant Officer and helicopter pilot.
March 2009: Warrant Officer Pickett joined the Army National Guard.
May 5, 2009: Warrant Officer Pickett received orders to deploy to
Iraq under Operation Iraqi Freedom. Although not required, Warrant
Officer Pickett notified Bank of America that he had been ordered to
active duty in Iraq. He served there until January 14, 2010, when he
returned home with spinal injuries incurred while piloting his
helicopter during operations.
July 2009: Bank of America offered Warrant Officer Pickett an
unsolicited modification to his mortgage with lower monthly payments.
He began making reduced payments in accordance with the modification
agreement.
September 2009: Warrant Officer Pickett's daughter called him in
Iraq to tell him that a notice had been posted on their front door
stating that a foreclosure sale had been scheduled for December 7,
2009. When Warrant Officer Pickett called Bank of America, he was told
that the modified payments he had been making for three months were
insufficient under the terms of his original loan.
October 2009: Bank of America reported Warrant Officer Pickett as
delinquent to at least one credit bureau. As a result, USAA canceled
Warrant Officer Pickett's credit card.
November 2009: Warrant Officer Pickett retained Colonel John Odom,
an attorney with Jones, Odom, Davis & Politz. Colonel Odom sent letters
by certified mail to Bank of America and its foreclosure attorneys
advising them that he was representing Warrant Officer Pickett and that
his mortgage was protected under the SCRA. Bank of America never
responded.
December 2, 2009: With the foreclosure sale scheduled for December
7, Colonel Odom sent a second letter requesting that Bank of America
contact him immediately, and he included a written authorization from
Warrant Officer Pickett for Colonel Odom to act on his behalf. Bank of
America never responded.
December 3, 2009: Colonel Odom sent a third letter requesting that
Bank of America's SCRA Department immediately halt the foreclosure
sale. An employee from Bank of America's Home Loan Servicing Center
informed Colonel Odom that his department could not stop the
foreclosure. Colonel Odom then spoke with a second employee, then a
third, and then left a voicemail with the bank's SCRA manager.
December 4, 2009: Colonel Odom spoke with an official in Bank of
America's SCRA Department who stated that the foreclosure had been
canceled and that he would provide written confirmation of the
cancellation to Colonel Odom. Bank of America never provided the
confirmation.
December 7 and 11, 2009: Colonel Odom faxed letters to Bank of
America's SCRA Department seeking confirmation that the foreclosure had
been canceled. Bank of America did not respond.
January 2010: Warrant Officer Pickett decided to list his home for
sale.
April 6, 2010: Several months later, on April 6, Warrant Officer
Pickett called Colonel Odom to tell him that his real estate agent
discovered a second foreclosure sale on his home while performing a
title search. This foreclosure sale was scheduled for the next day,
April 7. Colonel Odom immediately called Bank of America, who was
unable to verify the foreclosure sale. According to a realtor Colonel
Odom spoke with, tax records indicated that a foreclosure sale had
indeed been set for April 7, 2010. The foreclosure sale did not go
forward.
June 1, 2010: Two months later, on June 1, Warrant Officer Pickett
sent an e-mail to Colonel Odom stating that his realtor had discovered
a third foreclosure sale scheduled for two days later, on June 3, 2010.
Colonel Odom immediately called Bank of America, who claimed that
Warrant Officer Pickett's account was not being reviewed for
foreclosure. Colonel Odom spoke with Bank of America's foreclosure
attorneys, who informed him that Bank of America had indeed scheduled
the foreclosure sale for June 3, 2010, and that the loan had been in
foreclosure since September 1, 2009. The foreclosure sale did not go
forward.
June 7, 2011: In response to a suit filed against Bank of America
on behalf of Warrant Officer Pickett for violations of the SCRA, Bank
of America settled the case for an undisclosed amount.

B. Army Captain Kenneth Gonzales

Kenneth R. Gonzales currently serves as a Captain and Medical
Service Corps Officer in the U.S. Army in San Antonio, Texas, where he
lives with his wife and four children. From December 2009 to December
2010, then-Lieutenant Gonzales was deployed to Iraq. During his
deployment, his mortgage bank, Chase, attempted to foreclose on his
home in violation of the Servicemembers Civil Relief Act (SCRA). Chase
also made negative reports to credit bureaus regarding Lieutenant
Gonzales' mortgage payments, causing his security clearance to be
suspended. While he was in Iraq, Lieutenant Gonzales contacted the
Federal Trade Commission and his Senator, Kay Bailey Hutchison. These
officials reported Chase's actions to the American Bar Association and
the Office of the Comptroller of the Currency. A year and a half later,
the foreclosure has been halted and Captain Gonzales' security
clearance has been reinstated, but the Gonzales family lost several
months worth of mortgage payments as a result of Chase's actions.

Timeline

July 2005: Mr. Gonzales enlisted in the Army and later received his
commission as Lieutenant.
November 2008: Lieutenant Gonzales obtained a home mortgage that
was purchased by Chase.
November 2009: Lieutenant Gonzales informed Chase that he was being
deployed to Iraq and began using online access to pay his mortgage.
December 2009: Lieutenant Gonzales attempted to pay his mortgage
online from Iraq. Back in Texas, his wife also attempted to pay cash by
phone. As a result, Chase locked out Lieutenant Gonzales from its
online payment system for six months. Chase requested that Lieutenant
Gonzales's wife instead mail money orders, and the bank provided an
address to submit them.
January-May 2010: Each month, Lieutenant Gonzales's wife complied
with Chase's request, went to her bank to obtain money orders, and
mailed the money orders on time to the address Chase provided.
February 2010: Chase began reporting late mortgage payments by the
Gonzales family to credit bureaus. Chase also scheduled a foreclosure
sale of the Gonzales' home on April 10, 2010. Neither Lieutenant
Gonzales nor his wife was aware that foreclosure had been initiated or
that a sale date had been set.
April 2010: Chase sent a letter to the Gonzales' home asking them
to call regarding their mortgage. When Mrs. Gonzales called, she was
told that Chase was unsure why the letter was sent. During this
discussion, there was no mention of late payments or foreclosure
proceedings.
June 2010: When Lieutenant Gonzales was repeatedly denied access to
Chase's online mortgage payment system, he inquired and soon after
discovered that Chase had been reporting late mortgage payments to
credit bureaus. He was also informed that his security clearance had
been suspended as a result. His mission as one of ten soldiers
responsible for delivering blood products in Iraq was compromised, and
his access to information was restricted.
Lieutenant Gonzales contacted Chase repeatedly from Iraq, but its
representatives were unwilling to consider that the bank was in error.
Chase refused to correct the late payment reports to his credit and
told Lieutenant Gonzales to expect a lawyer's letter demanding the
repayment of fees associated with the foreclosure. By the end of June,
Lieutenant Gonzales had not received any letter, and a number given to
him by Chase for the bank's foreclosure attorney was out of service.
Lieutenant Gonzales took a number of affirmative steps from Iraq to
address the situation. He filed a complaint with the Federal Trade
Commission regarding Chase's mortgage practices, and he contacted his
Senator, Kay Bailey Hutchison.
July 2010: Senator Hutchison sent a letter to the Department of
Defense requesting assistance with Lieutenant Gonzales's case. She also
contacted the Office of the Comptroller of the Currency regarding
Chase's actions.
August-November 2010: An officer with the Legal Assistance Policy
Division of the Army's Judge Advocate General (JAG) repeatedly faxed an
authorization to Chase from Lieutenant Gonzales indicating that she was
acting on his behalf. Chase officials told her it would take 48 to 72
hours to confirm receipt of the authorization, but they claimed
repeatedly that they never received her faxes and would not accept e-
mail.
The JAG officer reported Chase to the American Bar Association,
which contacted a Senior Vice President at Chase. This official
immediately arranged to remove the erroneous late payments on
Lieutenant Gonzales's credit report. A Chase official admitted to the
JAG officer that the original authorization she faxed on Lieutenant
Gonzales's behalf indeed had been received on the first day she sent
it.
May 2011: Lieutenant Gonzales was promoted to Captain, and his
security clearance was reinstated. However, Chase claimed that it
``misplaced'' the five money orders sent in by Mrs. Gonzales from
January through May 2010. Mrs. Gonzales was able to recover three of
the five receipts for the money orders, but the remaining two receipts
were never located. Due to Chase's actions, the Gonzales family had to
pay two months worth of mortgage payments twice.

VI. EFFORTS BY RANKING MEMBER CUMMINGS TO INVESTIGATE
From the outset of the 112th Congress, Representative Elijah E.
Cummings, the Ranking Member of the House Committee on Oversight and
Government Reform, has sought a comprehensive investigation into abuses
by mortgage servicing companies, including an examination of illegal
foreclosures against servicemembers. To date, he has sent four letters
to Representative Darrell E. Issa, the Chairman of the Committee, but
Chairman Issa has declined to seek any information from mortgage
servicing companies relating to these abuses.
On December 21, 2010, Ranking Member Cummings sent his first letter
to Representative Issa in his new role as Chairman. Ranking Member
Cummings requested that Chairman Issa make investigating foreclosure
abuses one of the Committee's top priorities in the 112th Congress.
\36\
---------------------------------------------------------------------------
\36\ Letter from Ranking Member Elijah E. Cummings to Chairman
Darrell E. Issa (Dec. 21, 2010) (online at
democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5175&Itemid=49).
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On February 25, 2011, Ranking Member Cummings sent a second, more
detailed letter to Chairman Issa setting forth specific evidence of
widespread abuses by mortgage servicing companies and outlining steps
the Committee should take to investigate. This letter included specific
information about illegal foreclosures against servicemembers and asked
Chairman Issa to issue document requests to the nation's top ten
mortgage servicing companies. \37\
---------------------------------------------------------------------------
\37\ Letter from Ranking Member Elijah E. Cummings to Chairman
Darrell E. Issa (Feb. 25, 2011) (online at
democrats.oversight.house.gov/images/stories/Correspondence/
Foreclosure%20Letters/Cummings%20Letter%20to%20Issa.pdf)
---------------------------------------------------------------------------
When Chairman Issa declined to send these document requests,
Ranking Member Cummings sent them himself, requesting that the ten
mortgage servicing companies produce documents relating to allegations
of wrongful foreclosures, inflated fees, and other abusive practices.
\38\
---------------------------------------------------------------------------
\38\ See, e.g., Letter from Ranking Member Elijah E. Cummings to
Raymond D. Fortin, General Counsel, SunTrust Banks Inc. (Feb. 25, 2011)
(online at democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5229&Itemid=49).
---------------------------------------------------------------------------
On May 24, 2011, Ranking Member Cummings wrote a third letter to
Chairman Issa, reporting that several mortgage servicing companies
refused to provide documents in response to his previous requests. As a
result, Ranking Member Cummings requested that Chairman Issa issue
subpoenas to those mortgage servicing companies. \39\
---------------------------------------------------------------------------
\39\ Letter from Ranking Member Elijah E. Cummings to Chairman
Darrell E. Issa (May 24, 2011) (online at
democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5315&Itemid=49).
---------------------------------------------------------------------------
On June 21, 2011, Ranking Member Cummings wrote a fourth letter to
Chairman Issa, marking the six-month anniversary of his first letter
requesting the investigation. He provided additional information
regarding abuses by mortgage servicers and reiterated his request for
subpoenas for documents relating to illegal foreclosures, inflated
fees, and other abuses. He wrote:

If mortgage servicing companies are allowed to disregard requests
for documents that are integral to this investigation, the Committee's
integrity will be called into question and, more importantly, abuses
may continue. \40\
---------------------------------------------------------------------------
\40\ Letter from Ranking Member Elijah E. Cummings to Chairman
Darrell E. Issa (June 21, 2011) (online at
democrats.oversight.house.gov/index.php?option=com--
content&task=view&id=5350&Itemid=49).