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Congress presses DoD for allotment system reform

Jul. 31, 2014 - 06:00AM   |  
(File photo)
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Lawmakers are stepping up pressure on the Pentagon to improve the paycheck allotment system that allows service members to direct portions of their biweekly pay to certain people or institutions.

The call from Capitol Hill comes amid new reports of predatory lenders who abuse the system by requiring troops to authorize paycheck allotments as a condition of borrowing.

Last week ProPublica, a not-for-profit news organization, published an investigative report about USA Discounters, a little-known firm that allegedly offers troops high-interest loans to buy furniture and electronics and then seizes their active-duty pay using the allotment system.

In June 2013, Defense Secretary Chuck Hagel ordered a review of the military’s allotment system, and asked for a report to include recommendations on ways to protect service members from exploitation.

Now four Democratic senators are urging Hagel to wrap up his review.

“We need to crack down on predatory lenders that target military members,” Sen. Jack Reed, D-R.I., wrote in a letter to Pentagon officials Thursday. “It’s time for Secretary Hagel to expedite the DoD report so we can move quickly to prevent similar issues in the future.”

Pentagon spokesman Cmdr. Bill Urban said Thursday that the allotment review and a recommendation is expected to be forwarded to Hagel “soon.”

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