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Updates from Sen. Schatz (Nov. 24-Dec. 2)

MEDIA RELEASE

U.S. Sen. Brian Schatz (D-Hawaii) announced Nani Coloretti’s Senate confirmation as Deputy Secretary at the U.S. Department of Housing and Urban Development, becoming the highest ranking Filipino-American in the Obama Administration.

Coloretti hails from Kapahulu and graduated from Iolani School in 1987.

“The Department of Housing and Urban Development will gain an outstanding, well-qualified Deputy Secretary in Nani Coloretti,” Schatz said. “This is a proud moment for Hawaii and the Filipino-American community. As a native of Kapahulu and the highest-ranking Filipino-American in the Obama Administration, Nani not only brings strong leadership experience, but the ability to inspire the next generation of Filipino-American leaders in Hawaii and across the country. I am proud to call Nani a friend, and I look forward to continuing to work with her in her new role.”

Nani Coloretti’s most recent position was as Assistant Secretary for Management at the U.S. Department of Treasury, a position she has held since November 2012.

From 2009 to 2012, she served as the Deputy Assistant Secretary for Management and Budget at Treasury. Prior to joining the Obama Administration, Coloretti worked in the San Francisco Mayor’s office from 2005 until 2009, most recently serving as Budget Director.

Previously, Coloretti served as the Director of Policy, Planning, and Budget for the San Francisco Department of Children, Youth, and Their Families from 1999 to 2005.

SCHATZ URGES FAA TO ADDRESS SAFETY, SECURITY RISKS OF DRONES

Following reports of small unmanned aircraft sightings near commercial airports in New York and Florida, U.S. Sen. Brian Schatz (D-Hawaii) sent a letter to Federal Aviation Administration (FAA) Administrator Michael Huerta calling for immediate action to address the safety concerns and potential security risks of small unmanned aircraft, also known as drones.

“I recognize the opportunities with the expanded use of unmanned aircraft and the benefits of using them for search and rescue missions, disaster monitoring, and border surveillance, among others. However, with small unmanned aircraft becoming more prevalent, the FAA must ensure that requirements are in place to protect the safety of our local communities,” Schatz wrote. “Risks posed by unmanned aircraft are too serious to ignore. I strongly urge you to issue an emergency rule, such as an interim final rule, to ensure the safety of our communities.”

The full text of the letter to Administrator Huerta follows:

The Honorable Michael P. Huerta
Administrator
Federal Aviation Administration
U.S. Department of Transportation
800 Independence Avenue, SW
Washington, DC 20591

Dear Administrator Huerta:

I write to express strong concerns regarding small unmanned aircraft operating in the national airspace system. I urge you to take immediate action by issuing an emergency rulemaking, such as an interim final rule, that would adequately address safety concerns and potential security risks.

Last week’s reports of unmanned aircraft sightings near flights landing at John F. Kennedy International Airport, as well as the reported incident at Tallahassee Regional Airport earlier this year, demonstrate that this is a serious safety issue that could have enormous consequences if not addressed promptly.

In addition, small unmanned aircraft are vulnerable to being intentionally hacked or jammed if they do not have encrypted navigation systems. This could result in the loss of control of the unmanned aircraft and could inflict harm on Americans.

I recognize the opportunities with the expanded use of unmanned aircraft and the benefits of using them for search and rescue missions, disaster monitoring, and border surveillance, among others. However, with small unmanned aircraft becoming more prevalent, the FAA must ensure that requirements are in place to protect the safety of our local communities.

I understand that the Federal Aviation Administration is currently in the process of drafting a rule for small unmanned aircraft as directed in the FAA Modernization and Reform Act of 2012 (P.L. 112-95). The FAA has not met the August 2014 deadline to issue a final rule. It is critical that we move expeditiously to ensure the public’s safety.

As you know, risks posed by unmanned aircraft are too serious to ignore. I strongly urge you to issue an emergency rule, such as an interim final rule, to ensure the safety of our communities. Thank you for your attention to this matter, and I look forward to your response.

Regards,
BRIAN SCHATZ
United States Senator

SCHATZ STATEMENT ON IRAN NUCLEAR PROGRAM NEGOTIATIONS

U.S. Sen. Brian Schatz (D-Hawaii) released the following statement in response to the announcement that negotiators from United States, United Kingdom, France, Russia, China, Germany (known as the P5+1) and Iran agreed to extend negotiations over Iran’s nuclear program through June 30, 2015:

“Throughout these negotiations, I have been deeply skeptical about the Iranian regime’s willingness to make the concrete concessions necessary to convince the world that its nuclear program is peaceful. The crippling sanctions that the United States and the international community imposed on Iran have been instrumental in bringing the regime to the negotiating table. These sanctions cannot be eased unless leaders in Tehran provide more than simple promises that they are not seeking a nuclear weapon, and they have yet to give anything beyond assurances.

“The United States and its partners continue to make progress in these negotiations and remain steadfast in getting a good deal rather than settling on terms that will leave the United States, Israel, and the international community worse off. I will continue to closely monitor negotiations over the coming months to ensure that any final deal includes a strict verification regime with unprecedented inspection and monitoring procedures that will verify that Iran’s pathways to a nuclear weapon have been blocked.

“Members of Congress are right to remain vigilant about ensuring Iran’s full and substantiated compliance with any final deal. Anything less is non-negotiable. But we ought to refrain from taking premature legislative action during these final months that could permanently derail negotiations, undermine the tough multilateral sanctions on Iran, and lead the regime to restart the unrestricted and unmonitored nuclear program that we are determined to end.”

———

SCHATZ, REED, DURBIN, SENATORS BACK DOD PLAN TO BETTER PROTECT MILITARY FAMILIES FROM ABUSIVE FINANCIAL PRACTICES

U.S. Sens. Brian Schatz (D-Hawaii), Jack Reed (D-R.I.), Assistant Senate Majority Leader Dick Durbin (D-Ill.) and 37 Senate colleagues wrote to the Department of Defense (DoD) in support of its plan to update the Military Lending Act (MLA) and close existing loopholes in order to better protect soldiers and their families from abusive financial practices.

The letter expresses strong support for the proposed new rule to help prevent lenders from charging excessive fees and taking advantage of military families.

Following a 2006 Pentagon report that found that “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all-volunteer fighting force,” Congress passed the MLA.

This law capped the annual interest rates for consumer credit to service members and their dependents at 36 percent while giving DoD the authority to define what loans should be covered.

The DoD’s 2007 implementing regulations narrowly included only three types of loans: (1) payday loans: closed-end loans with terms of 91 days or fewer, for $2,000 or less; (2) auto title loans: closed-end loans with terms of 181 days or fewer; and (3) refund anticipation loans: closed-end credit.

In the proposed changes to the MLA, first announced in September, DoD seeks to close existing loopholes in the current MLA rule by applying the interest rate cap to a broader range of consumer credit products. Today’s letter voices strong support for the proposed rule, arguing that the changes strike a better balance between protecting service members and their families while maintaining access to credit.

“As our service members are asked to take on even more tasks in defense of our nation, we should take every opportunity to protect them and their families here at home, especially from unscrupulous lenders,” the Senators wrote. “We strongly support the proposed MLA rule and urge that the final MLA rule be similarly robust in enhancing protections for service members and their families, producing significant cost savings for DOD, and improving military readiness.”

Schatz, Reed, and Durbin were joined by Sens. Mark Udall (D-Colo.), Levin (D-Mich.), Brown (D-Ohio), Hirono (D-Hawaii), Manchin (D-W.Va.), Warner (D-Va.), Franken (D-Minn.), Baldwin (D-Wisc.), Nelson (D-Fla.), Murphy (D-Conn.), Blumenthal (D-Conn.), Merkley (D-Ore.), Heinrich (D-N.M.), Warren (D-Mass.), Gillibrand (D-N.Y.), Murray (D-Wash.), Whitehouse (D-R.I.), King (I-Maine), Klobuchar (D-Minn.), Tom Udall (D-N.M.), Kaine (D-Va.), McCaskill (D-Mo.), Shaheen (D-N.H.), Markey (D-Mass.), Bennet (D-Colo.), Coons (D-Del.), Donnelly (D-Ind.), Feinstein (D-Calif.), Cardin (D-Md.), Carper (D-Del.), Wyden (D-Ore.), Heitkamp (D-N.D.), Tester (D-Mont.), Boxer (D-Calif.), Hagan (D-N.C.), Harkin (D-Iowa), and Schumer (D-N.Y.) in signing onto the letter.

The comment period, which was recently extended, for the proposed rule ends on Dec. 26, 2014.

The full text of the letter follows:

The Honorable Chuck Hagel
Secretary
U.S. Department of Defense
1000 Defense Pentagon
Washington, D.C. 20301-1000

Re: Limitations on Terms of Consumer Credit Extended to Service members and Dependents
Docket ID: DoD-2013-OS-0133

Dear Mr. Secretary:

We are writing in response to the Department of Defense (DOD) proposal to update the implementing rules for the Military Lending Act (MLA).

By enacting the MLA as part of the John Warner National Defense Authorization Act for Fiscal Year 2007, Congress sent a clear bipartisan message that protecting service members and their families from predatory and high cost lending was of paramount importance to their financial security and military readiness.

This concern was reiterated in the Conference Report for the National Defense Authorization Act for Fiscal Year 2013, which stated that “the conferees are concerned that the Department must remain vigilant to eliminate continuing, evolving predatory lending practices targeting service members and their families, and believe the Department should review its regulations implementing section 987, to address changes in the industry and the evolution of lending products offered since 2007, continuing use of predatory marketing practices, and other abuses identified by consumer protection advocates, including the Consumer Financial Protection Bureau’s Office of Servicemember Affairs.”

As a result of this required review of the current MLA rule, DOD in its proposal now recommends closing existing MLA loopholes. We believe this strikes a significantly better balance than the current MLA rule between protecting service members and their families on the one hand and maintaining access to non-predatory credit on the other. As such, this proposal also does a much better job of reflecting Congressional intent.

Specifically, we support the proposal to expand the MLA’s “definition of ‘consumer credit’ to cover a broader range of closed-end and open-end credit products.” In so doing, the rule proposes that these products be treated in a manner generally consistent with the decades-old requirements of the Truth in Lending Act.

This comprehensive approach is essential to preventing future evasions. As DOD notes in its proposed rule, “the extremely narrow definition of ‘consumer credit’ permits creditors to structure credit products in order to reduce or avoid altogether the obligations of the MLA.” For example, MLA protections currently can be avoided by simply adding a day to the term of a payday loan or by lending just one additional cent so that the payday loan no longer qualifies as “consumer credit” subject to the MLA protections.

Contrary to Congressional intent, these evasions threaten military readiness. According to DOD, “each separation of a service member is estimated to cost the Department $57,333, and the Department estimates that each year approximately 4,703 to 7,957 service members are involuntarily separated due to financial distress.” In addition to the estimated cost savings DOD has identified, we give great weight and deference to DOD’s statement that the proposed MLA rule “would reduce non-quantifiable costs associated with financial strains on service members. High-cost debt can detract from mission focus, reduce productivity, and require the attention of supervisors and commanders.” As a result, we strongly agree with DOD’s view that the proposed MLA rule not only has the potential to produce substantial cost savings, but also enhance military readiness.

In August of last year, a number of us wrote, “service members and their families deserve the strongest possible protections and swift action to ensure that all forms of credit offered to members of our armed forces are safe and sound.” Indeed, as our service members are asked to take on even more tasks in defense of our nation, we should take every opportunity to protect them and their families here at home, especially from unscrupulous lenders.

For all these reasons, we strongly support the proposed MLA rule and urge that the final MLA rule be similarly robust in enhancing protections for service members and their families, producing significant cost savings for DOD, and improving military readiness.

Sincerely,

Reed
Durbin
Mark Udall
Levin
Brown
Hirono
Manchin
Warner
Franken
Baldwin
Nelson
Murphy
Blumenthal
Merkley
Heinrich
Warren
Gillibrand
Murray
Whitehouse
King
Klobuchar
Tom Udall
Kaine
McCaskill
Shaheen
Schatz
Markey
Bennet
Coons
Donnelly
Feinstein
Cardin
Carper
Wyden
Heitkamp
Tester
Boxer
Hagan
Harkin
Schumer

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