Quirk-Silva Introduces Bill to Protect Reservists from Predatory Lending

Friday, April 6, 2018

Introduction of AB2521 calls for an End to Predatory Lenders Taking Advantage of Veterans Like those in the National Guard

(SACRAMENTO) – Assemblywoman Quirk-Silva (D – Orange County) introduces Assembly Bill 2521 (AB 2521) which would seek to stop predatory banking practices that plague reservists. Certain terminology in Military and Veteran Code, section 800 (MVC § 800) has been used as a weapon against reservists who are requesting a deferment of applicable loans and obligations when they prepare for deployment.

“There are bad actors taking advantage of reservists and the programs they use with their well-deserved benefits,” said Quirk-Silva. “Some lenders target reservists that seek payment deferral before being deployed. This often leads to higher loan amounts, and to our reservists and their families in a worse financial position than they had before deployment. Our men and women in uniform deserve better.”

While deployed, reservists like those in the National Guard, are subject to deferred payment deals from predatory lenders that seek to take advantage of reservists through differing interpretation of contractual language. For those serving in the National Guard, these practices are of paramount concern as thousands are frequently called for deployment to address the large amount of emergencies across the state in a given year.

“This simple, yet effective, amendment would seek to protect our heroes from predatory banking practices when reservists are activated,” said Quirk-Silva.

Reservists are not afforded legal assistance in preparing their personal financial documents and may not know if they are using the specific verbiage, in order to obtain the protections afforded.  Recently, servicemembers have experienced denial of the protections provided under MVC §800 by their financial institution under the premise that the reservists did not include the exact verbiage of “under penalty of perjury” in their letter to the financial institution.  As the servicemembers must provide official documentation of their orders to active military service to their obligor, it is redundant to require the current exacting verbiage, and to use this language as a loop-hole to deny a reservist’s protections under state law. 

This bill is sponsored by the National Guard Association of California (NGAC). “The NGAC thanks Assemblywoman Quirk-Silva for carrying this important legislation which will benefit the men and women who serve our country and our state in times of need”, said John Haramalis, President of the NGAC.

The bill will first be heard in the Assembly Committee on Veteran Affairs on April 24.