Changes to military pay allotments aim to protect Airmen against predatory lenders

Published Dec. 9, 2014
By 71st Flying Training Wing Public Affairs

VANCE AIR FORCE BASE, Okla. -- New rules prohibiting the use of allotments to purchase, lease or rent personal property are scheduled to take effect Jan. 1, 2015.

The policy change was signed by the Secretary of Defense, and is intended to protect Airmen against predatory lending.

In response to a major enforcement action by the Consumer Financial Protection Bureau, an interagency team assessed the military allotment system and proposed changes to prevent businesses from taking advantage of servicemembers. Allotments are virtually guaranteed, which makes selling unaffordable items to servicemembers enticing to unscrupulous businesses.

"I think this is another smart way we are defending ourselves," said Tech. Sgt. Kimberly Chabarria, the 71st Comptroller Squadron flight chief of financial management. "Airmen can be targeted by predator companies who will try to take advantage of their inexperience."

Airmen will no longer be able to start new allotments on vehicles, appliances or electronics. Existing allotments will not be cancelled.

Authorized allotments include money going to dependents or relatives, insurance, debt payments to the U.S. Government, mortgages, savings account deposits and Combined Federal Campaign donations.

"I believe this policy change will only have a minor impact on Airmen," said Chabarria. "They can still make payments on purchases, but will need to do it through their banking channels instead of the company they make purchases through."

For more information, visit the 71st Comptroller Squadron.