Directs the Secretary of Veterans Affairs to conduct an outreach program to inform veterans and other potential recipients of such compensation or pension of the prohibition against the assignment of such benefits, including information on various schemes to evade the prohibition and means of avoiding such schemes.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2975 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 2975
To amend title 38, United States Code, to clarify the applicability of
the prohibition on assignment of veterans benefits to agreements
regarding future receipt of compensation, pension, or dependency and
indemnity compensation, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 25, 2003
Mr. Strickland (for himself and Mr. Shimkus) introduced the following
bill; which was referred to the Committee on Veterans' Affairs
_______________________________________________________________________
A BILL
To amend title 38, United States Code, to clarify the applicability of
the prohibition on assignment of veterans benefits to agreements
regarding future receipt of compensation, pension, or dependency and
indemnity compensation, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Veterans Benefits and Pensions
Protection Act of 2003''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds the following:
(1) In exchange for a lump-sum payment from a lender, some
veterans are surrendering their rights to full future
compensation benefits from the Department of Veterans Affairs
by assigning those benefits to lenders.
(2) Despite language in section 5301 of title 38, United
States Code, that states that payments of veterans' benefits
from the Department of Veterans Affairs shall not be assignable
and shall be exempt from the claim of creditors, lenders are
entering into contracts with veterans that require the veteran
to either give access to their benefit monies to the lender or
pay the lender a percentage of their benefit payment each
month.
(3) The contracts for these credit transactions do not
disclose information that is required to be disclosed under the
Truth in Lending Act, including the amount financed, the
finance charge, and the annual percentage rate (APR).
Therefore, when signing the contract, the veteran cannot
accurately determine the cost of credit obtained by the
veteran.
(4) As a result, those transaction agreements are
detrimental to veterans as they are required to pay interest
rates ranging from 39 percent to 106 percent.
(b) Purpose.--The purpose of this Act is to clarify the definition
of a veterans benefit assignment under section 5301 of title 38, United
States Code, in order to make illegal the credit transactions between
veterans and lenders in which the veteran gives the lender access to
benefits payments either through an account or by the guaranteeing of
monthly payments.
SEC. 3. APPLICABILITY OF PROHIBITION ON ASSIGNMENT OF VETERANS BENEFITS
TO AGREEMENTS ON FUTURE RECEIPT OF CERTAIN BENEFITS.
(a) In General.--Section 5301(a) of title 38, United States Code,
is amended--
(1) by inserting ``(1)'' after ``(a)'';
(2) by designating the last sentence as paragraph (2); and
(3) by adding at the end the following new paragraph:
``(3)(A) For the purposes of this subsection, an agreement
described in subparagraph (D) shall be deemed to be an assignment and
is prohibited.
``(B) An agreement or arrangement for collateral for security for
an agreement that is prohibited under subparagraph (A) is also
prohibited.
``(C)(i) A person who enters into an agreement that is prohibited
under subparagraph (A), or into an agreement or arrangement that is
prohibited under subparagraph (B), shall be fined under title 18,
imprisoned for not more than one year, or both.
``(ii) This subparagraph does not apply to a beneficiary with
respect to compensation, pension, or disability and indemnity
compensation to which the beneficiary is entitled under a law
administered by the Secretary.
``(D) An agreement described in this subparagraph is an agreement
between a person who is a beneficiary entitled to compensation,
pension, or dependency and indemnity compensation and another person
under which such other person acquires for consideration the right to
receive payment of such compensation, pension, or dependency and
indemnity compensation, as the case may be, whether by payment from the
beneficiary to such other person, deposit into an account from which
such other person may make withdrawals, or otherwise.''.
(b) Effective Dates.--(1) Subparagraphs (A) and (B) of paragraph
(3) of section 5301(a) of title 38, United States Code (as added by
subsection (a) of this section), shall apply with respect to any
agreement or arrangement described in those subparagraphs, whether
entered into before, on, or after the date of the enactment of this
Act, and any such agreement or arrangement entered into before the date
of the enactment of this Act is void and unenforceable as of such date.
(2) Subparagraph (C) of such paragraph shall apply with respect to
any agreement or arrangement covered by such subparagraph that is
entered into on or after the date of the enactment of this Act.
(c) Outreach.--The Secretary of Veterans Affairs shall, during the
five-year period beginning on the date of the enactment of this Act,
carry out a program of outreach to inform veterans and other recipients
or potential recipients of compensation, pension, or disability and
indemnity compensation benefits under the laws administered by the
Secretary of the prohibition on the assignability of such benefits
under law. The program shall include information on various schemes to
evade the prohibition, and means of avoiding such schemes.
(d) Authorization of Appropriations.--There is hereby authorized to
be appropriated for the Department of Veterans Affairs for each of
fiscal years 2004 through 2008 the amount of $3,000,000 for purposes of
carrying out the program of outreach required by subsection (c).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Veterans' Affairs.
Referred to the Subcommittee on Benefits.
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