To direct the Undersecretary of Defense (Comptroller) to carry out a pilot program to develop innovative consumer financial products that encourage savings and wealth-creation among active-duty servicemembers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Savings Act of 2012''.

SEC. 2. CONSUMER FINANCIAL PRODUCTS PILOT PROGRAM.

    (a) In General.--The Undersecretary of Defense (Comptroller) shall 
carry out a 5-year pilot program to develop innovative consumer 
financial products that encourage savings and wealth-creation among 
active-duty servicemembers.
    (b) Objectives.--Financial products developed under this section 
may seek to--
            (1) increase the rate of savings among active-duty 
        servicemembers by providing automatic deposit into a savings 
        account of special pay and allowances received by a 
        servicemember, including special pay and allowances received on 
        account of the servicemember's deployment;
            (2) reduce the need for high-cost short-term lending 
        services by providing alternatives to servicemembers, such as 
        financial institutions providing an option for servicemembers 
        to receive advances on their salary payments, such that 
        servicemembers receive pay in more frequent installments, and 
        where any interest or fees on such advances shall not exceed 
        the rate described in section 987(b) of title 10, United States 
        Code and shall adhere to the Affordable Small Dollar Lending 
        Guidelines of the Federal Deposit Insurance Corporation;
            (3) address obstacles to traditional consumer banking and 
        lending for servicemembers with limited credit history; and
            (4) otherwise encourage savings and wealth-creation among 
        active-duty servicemembers.
    (c) No Exacerbation of Credit Overextension.--The pilot program 
carried out under this section shall be carried out in such a way that 
it does not exacerbate the incidence of credit overextension among 
servicemembers.
    (d) Implementation.--
            (1) Selection of military installations.--The 
        Undersecretary shall choose at least 10 military installations 
        on which to implement the pilot program.
            (2) Incorporation into operating agreements.--With respect 
        to a military installation chosen by the Undersecretary under 
        paragraph (1), a financial institution seeking to begin 
        operating on such installation, or seeking to renew an 
        agreement to operate on such installation, shall--
                    (A) agree to offer the consumer financial products 
                developed under this section; and
                    (B) notify servicemembers 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 Undersecretary 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 end of the 2-year 
        period beginning on the date of the enactment of this Act, and 
        annually thereafter until the end of the pilot program, the 
        Undersecretary shall contract for an independent evaluation of 
        the pilot program carried out under this section. Such 
        evaluation--
                    (A) shall include the degree to which the pilot 
                program succeeded in the goals of increasing usage of 
                savings products, programs, and tools; and
                    (B) shall 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 Undersecretary shall issue a report to the 
        Committees on Armed Services and Financial Services of the 
        House of Representatives and the Committees on Armed Services 
        and Banking, Housing, and Urban Affairs of the Senate 
        containing all findings and conclusions made by the contractor 
        in carrying out such evaluation.
    (g) Expansion of Pilot Program.--Notwithstanding subsection (a), 
the Undersecretary 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 
Undersecretary, if the Undersecretary determines that such expansion is 
expected to--
            (1) improve the rates of savings among servicemembers and 
        their families; or
            (2) decrease the need for servicemembers and their families 
        to rely on payday lenders without exacerbating credit 
        overextension.
    (h) Financial Institution Defined.--For purposes of this section, 
the term ``financial institution'' means an insured depository 
institution (as defined under section 3(c)(2) of the Federal Deposit 
Insurance Act (12 U.S.C. 1813(c)(2))) or a credit union.

Summary: Military Savings Act of 2012 - Directs the Undersecretary of Defense (Comptroller) to carry out a five-year pilot program to develop innovative consumer financial products that encourage savings and wealth-creation among active-duty servicemembers. Requires the program to be carried out in such a way that it does not exacerbate the incidence of servicemember credit overextension. Directs the Undersecretary to choose at least 10 military installations at which to implement the program. Directs the Undersecretary to contract for an annual independent program evaluation until its termination. Allows the Undersecretary, under certain conditions, to expand the program to a nationwide program and to extend its duration.