By Edgar Ortega, Public Citizen Intern

As Veterans’ Day approaches, I am grateful for the people that serve in the armed forces. It takes a lot of courage to serve our nation. But while on active duty, military members are targeted by predatory lenders. Further, the Pentagon considers debts accumulated by military members to be a “significant morale and readiness issue.” That’s why it is important for military members to be protected from predatory lending practices.

Military personnel are required to receive their paycheck via direct deposit, on their checking accounts. For many young soldiers, this could be the first time they are selecting a checking account, and evaluating the features and fees. Military members can be deployed or moved frequently between bases, so it is crucial that they are shielded from fraudulent financial industry conduct.

The Pew Charitable Trusts studied banking options offered at banks and credit unions located on military bases. The study covered overdraft policies, disclosure of fees, and access to courts.

Pew found that more than half of the banks (11 out 17) it studied had forced arbitration clauses. These clauses prevent customers from suing in court for unfair and deceptive practices or other predatory conduct that cause financial harm.

According to Pew, only 4 out the 11 banks with arbitration clauses have an opt-out option, and none of the credit unions, with arbitration clauses, offer the option. Opt-out clauses typically allow consumers to get out of arbitration before a dispute by doing so in writing and within a time period after opening an account. However, opt-out clauses are not effective for service members or other consumers because most are unaware that these terms exist and the requirements for opting out are often difficult.

Banks can also limit legal recourse options though the use of class action bans. Class action lawsuits can be a “strong deterrent for an institution to engage in harmful or questionable practices,” said Pew in its report. Pew found that 12 out of 17 banks on military bases had class action bans while 6 out of 80 credit unions had them.

Service members,like all consumers, need the ability to access the court system to resolve disputes against powerful corporations. The Consumer Financial Protection Bureau (CFPB) can ensure that financial services providers do not engage in “unfair, deceptive, or abusive” conduct. It can ban forced arbitration in financial contracts and stop this unfair practice that affects us all.