Military Savings Act of 2013

Summary: Military Savings Act of 2013 - Requires the Under Secretary of Defense (DOD) to carry out a five-year pilot program at at least 10 military installations to develop innovative consumer financial products that encourage savings and wealth-creation among members of the Armed Forces on active duty.  Authorizes products designed to: (1) increase the rate of savings among such members by providing automatic deposit of special pay and allowances; (2) reduce the need for high-cost short-term lending services by providing alternatives, such as financial institutions providing an option for members to receive advances on salary payments; and (3) address obstacles to traditional consumer banking and lending for members with limited credit history. Requires a financial institution seeking to begin or renew operating on a military installation selected for such program to agree to offer such products and to notify members about the availability of such products.  Directs the Under Secretary to contract for an annual independent evaluation of such program. Authorizes the Under Secretary to extend the program and expand it nationwide upon determining that such expansion would improve member savings rates or decrease their need to rely on payday lenders.     

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Savings Act of 2013''.

SEC. 2. CONSUMER FINANCIAL PRODUCTS PILOT PROGRAM.

    (a) In General.--The Under Secretary of Defense (Comptroller) shall 
carry out a 5-year pilot program to develop innovative consumer 
financial products that encourage savings and wealth-creation among 
members of the Armed Forces on active duty.
    (b) Objectives.--Financial products developed under this section 
may be designed to--
            (1) increase the rate of savings among members of the Armed 
        Forces on active duty by providing automatic deposit into a 
        savings account of special pay and allowances received by such 
        a member, including special pay and allowances received on 
        account of the deployment of the member;
            (2) reduce the need for high-cost short-term lending 
        services by providing alternatives to members of the Armed 
        Forces on active duty, such as financial institutions providing 
        an option for such members to receive advances on their salary 
        payments--
                    (A) in a manner that permits such members to 
                receive pay in more frequent installments; and
                    (B) under which any interest or fees on such 
                advances--
                            (i) does not exceed the rate described in 
                        section 987(b) of title 10, United States Code; 
                        and
                            (ii) adheres to the Affordable Small-Dollar 
                        Loan Guidelines of the Federal Deposit 
                        Insurance Corporation;
            (3) address obstacles to traditional consumer banking and 
        lending for members of the Armed Forces with limited credit 
        history; and
            (4) otherwise encourage savings and wealth-creation among 
        members of the Armed Forces on active duty.
    (c) No Exacerbation of Credit Overextension.--The pilot program 
carried out under this section shall be carried out in a manner that 
does not exacerbate the incidence of credit overextension among members 
of the Armed Forces.
    (d) Implementation.--
            (1) Selection of military installations.--The Under 
        Secretary shall select at least 10 military installations on 
        which to implement the pilot program.
            (2) Incorporation into operating agreements.--A financial 
        institution seeking to begin operating on a military 
        installation selected by the Under Secretary under paragraph 
        (1), or seeking to renew an agreement to operate on such an 
        installation, shall--
                    (A) agree to offer the consumer financial products 
                developed under this section; and
                    (B) notify members of the Armed Forces that are 
                customers of the institution about the availability of 
                the consumer financial products developed under this 
                section.
    (e) Consultation.--In developing consumer financial products under 
this section, the Under Secretary shall consult with Federal banking 
regulators with expertise in depository institutions, Federal agencies 
with experience regulating financial products, and consumer and 
military service organizations with relevant financial expertise.
    (f) Independent Evaluation.--
            (1) In general.--Not later than the date that is 2 years 
        after the date of the enactment of this Act, and annually 
        thereafter until the end of the pilot program, the Under 
        Secretary shall contract for an independent evaluation of the 
        pilot program carried out under this section. Such evaluation 
        shall--
                    (A) include the degree to which the pilot program 
                succeeded in the goals of increasing usage of savings 
                products, programs, and tools among members of the 
                Armed Forces on active duty; and
                    (B) be conducted by a contractor with knowledge of 
                consumer financial products and experience in the 
                evaluation of such products.
            (2) Report.--After each evaluation carried out pursuant to 
        paragraph (1), the Under Secretary shall submit to the 
        Committees on Armed Services and Banking, Housing, and Urban 
        Affairs of the Senate and the Committees on Armed Services and 
        Financial Services of the House of Representatives a report 
        containing all findings and conclusions made by the contractor 
        in conducting the evaluation.
    (g) Expansion of Pilot Program.--Notwithstanding subsection (a), 
the Under Secretary may expand the pilot program, including extending 
the duration of the program and expanding the program to make it a 
nationwide program, to the extent determined appropriate by the Under 
Secretary, if the Under Secretary determines that such expansion is 
expected to--
            (1) improve the rates of savings among members of the Armed 
        Forces and their families; or
            (2) decrease the need for members of the Armed Forces and 
        their families to rely on payday lenders without exacerbating 
        credit overextension.
    (h) Financial Institution Defined.--In this section, the term 
``financial institution'' means an insured depository institution (as 
defined in section 3(c)(2) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(c)(2))) or a credit union.