WASHINGTON — U.S. Rep. Mac Thornberry faced a political fight with his first major piece of legislation as the chairman of the House Armed Services Committee, and the issue had nothing to do with the Islamic State, Vladimir Putin or Iran.
Instead, the Clarendon Republican and many of his GOP committee colleagues have been under Democratic fire for backing language in a bill that would delay stricter regulations on high-interest lenders, which critics say prey on young service members.
Democrats and some consumer advocacy groups say that Thornberry sided with “predatory” lenders who set up shop within walking distance of military bases and target members of the military who might be financial novices.
But Thornberry denies siding with anyone, saying the issue is a matter of personal freedom.
“If you look outside military posts, there’s a variety of different kinds of businesses,” said Thornberry. “And so I do think it’s a question: How much do we want to put in federal law, about eating fast food? Or various other kinds of things?”
The spat illustrates how Thornberry’s powerful new position makes him a target for political attacks, even though he is in one of the safest Republican seats in the country.
Since January, he's run a committee with a sprawling jurisdiction, and Democrats are closely watching the voting records of Republicans in competitive districts, including several on Thornberry's committee.
The debate over lending regulations started in September, when the U.S. Department of Defense released recommendations to enhance consumer protections for military members who seek loans.
The proposal won praise from advocates who worry about young service members winding up with paralyzing loans after impulsive financial decisions.
“Taking advantage of loopholes, lenders have continued to charge military families annual percentage rates as high as 500 percent,” Holly Petraeus, the assistant director in the Consumer Financial Protection Bureau’s Office of Servicemember Affairs, said in a news release.
Petraeus is the wife of retired Gen. David H. Petraeus.
Small Section, Big Debate
In April, the House Armed Services Committee hashed out its proposed National Defense Authorization Act, its biggest piece of legislation. The plan included a small section proposing a delay in enacting stricter regulations for high interest loans for members of the military.
Supporters of the delay cited concerns with a Pentagon-run database that could not handle queries into whether a prospective loan signee is a military member.
But U.S. Rep. Tammy Duckworth, D-Ill., an Iraq War veteran, aimed to strike that language from the legislation, saying that delays would "have forced the Department of Defense to waste resources undertaking redundant studies and postpone the implementation of valuable protections."
The issue came to a head in marathon meeting among committee members. Twenty-seven Democrats, along with five Republicans, voted with Duckworth to stop regulation delays. Thornberry and 29 other Republicans voted on the side of delaying regulations.
The regulation fight, for now, is dormant. But it could come up again when the Senate and House come together to work on compromise legislation.
Thornberry said his reasoning on military lending is twofold.
One, he said, the database used to verify whether a loan customer is in the military is at risk for a systemic implosion like what happened when the federal Affordable Care Act was being implemented in 2013.
Thornberry said his staff did a trial run on the current database and ran into problems.
"Now if every credit transaction in the country has to get on this database, imagine what it’s going to be like then, and the implications for our military personnel system if the whole thing bogs down," he said.
Other Republicans who cast the same vote echoed his concerns.
Some consumer advocates and critics, like the group Texas Appleseed, say they are dubious of the database concerns.
“Everyone in Washington recognized this for what it was: a thinly veiled attempt to kill the new rules without leaving fingerprints,” the advocacy group wrote in a letter to the Wichita Falls Times Record News, a newspaper in Thornberry's district.
A bipartisan measure did, however, make it into the bill that passed the House calling for a series of reports to verify the Pentagon's ability to handle the loan verifications.
A Pentagon spokesman responded to the database concerns by Thornberry and other Republicans.
“The Department of Defense provides a range of tools and services … to help service members and their families establish a clear picture of their financial situation, prioritize their financial goals, and identify appropriate strategies to attain them,” Lt. Commander Nate Christensen wrote in an email.
“Financial readiness is important to us, and vital to mission success,” he added.
Questioning the Need for Regulation
Thornberry also argued about the issue of personal responsibility. He said that educating soldiers on financial literacy and mentorship is the ideal way to prevent the problem.
“Can anybody get away with anything? Of course not,” he added. “If you’re an adult, if you are eligible to be drafted and vote, then there’s a certain amount of decision-making power, and I think we have to be respectful of that.”
“But again, it’s how far do you go in regulating?"
The political implications cannot be underestimated on this issue. Accusing an opponent of siding with "predatory lenders" is a tried and effective attack that can be easily packaged into a 30-second commercial.
The House Democratic political arm, the Democratic Congressional Campaign Committee, is already hammering a handful of vulnerable Armed Services Committee Republicans who voted with Thornberry.
"It's clear that House Republicans are more interested in protecting predatory lenders than our service members and their families," DCCC spokesman Matt Thornton said. "This is an issue we will make sure voters remember next November."
Thornberry brushed off the DCCC's push.
“The DCCC sends out letters to all the press about what a terrible vote that is,” Thornberry said. “And yet, the problem remains that if this regulation is implemented without testing out the database, it can have huge consequences for the military personnel system.”
In recent weeks, the DCCC stepped up criticism of Republicans from competitive districts in places like New Jersey, Arizona and California. Thornberry is in a safely Republican northwest Texas district and is largely immune from such attacks.
But there are some in consumer advocacy and Democratic circles who do question Thornberry's own campaign fundraising in light of this issue.
One of the strongest proponents for a delay is a trade organization called the American Financial Services Association. The organization and many of its members contribute tens of thousands of dollars to both parties. They have also donated to Thornberry.
A number of those member companies are known to have high interest rates and branches near military bases.
"The lenders who make up our organization extend credit to help members of the military and other consumers live better," ASFA President Chris Stinebert wrote in response to a critical New York Times editorial on the matter. "Unfortunately, you support rules to amend the Military Lending Act that will disrupt and deter a lending process that works smoothly and quickly."
The AFSA’s executive vice president, Bill Himpler, raised more than $33,000 for Thornberry in the first quarter of this year. In prior election cycles, Thornberry was virtually ignored by the financial services and credit industries.
Thornberry firmly pushed back against any suggestion that the lending industry’s donations influenced his vote: “Of course not.”
“I receive contributions from a variety of people who are interested in what the Armed Services Committee does,” he said. “And that has, I think, always been true.”
Thornberry’s initial campaign finance report for the first part of this year showed Himpler donating $13,150 to his campaign — exceeding federal contribution limits.
Himpler said in an email that he did not make the personal contributions. And last week, Thornberry’s camp filed an amended finance report explaining that errant donation documentations were made due to “software compliance errors.”
“We entered all the information in correctly, and we looked at it, and it looked good but when it got transmitted to the FEC, some of the specifics got left off,” he said, pointing to a frequently used campaign compliance software called Aristotle.
For Thornberry, all of this recent drama illustrates how holding the gavel on the Armed Services Committee means more scrutiny. But he is firm about his intentions.
“The key for me is, trying to do the right thing for the troops and for the country,” he said. “If people choose to contribute, that’s their choice. But I think we make it clear that you do it because support what I’m trying to do. There’s no other reason to make such contributions.”