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Wife of Gen. Petraeus appointed consumer advocate

By Jessica Yellin and Kevin Bohn, CNN
  • NEW: Holly Petraeus is picked to head a key consumer office
  • NEW: She will lead the Office for Servicemember Affairs
  • NEW: Holly Petraeus is the wife of Gen. David Petraeus
  • Petraeus is a longtime advocate for military families

Washington (CNN) -- Holly Petraeus, the wife of the top U.S. general in Afghanistan, Gen. David Petraeus, was named Thursday to a key position in the new Consumer Financial Protection Bureau.

Petraeus, a longtime advocate for military families, was selected to head the Office of Servicemember Affairs, tasked with protecting military families from abusive lending practices.

The office will be able to write rules prohibiting unfair and deceptive practices by banks and nonbank entities that target service members and their families. The office also will ensure that credit cards, loans and mortgages follow existing regulations.

"One way we can begin to pay our debt to those who serve is by strengthening protections against financial abuse," Deputy Treasury Secretary Neal Wolin said. "That's why we are fortunate -- and grateful -- that Holly has agreed to lead (this) effort."

The Consumer Financial Protection Bureau was created by the Wall Street reform bill. Consumer advocate Elizabeth Warren, now a senior Treasury Department official, is in charge of setting it up. The source told CNN that Warren personally selected Petraeus for this role.

The financial abuse of service members was one key impetus to forming this new bureau. Consumer advocates say that while service members are deployed overseas, too often unscrupulous lenders have been luring them and their families into sham deals and abusive contracts advertising easy credit.

Critics have singled out car dealers in particular, accusing them of luring service members into loans they couldn't afford. The National Association of Auto Dealerships vigorously lobbied to be excluded from oversight by the new consumer protection bureau and largely succeeded.

Currently, Holly Petraeus is the director of the Better Business Bureau's Military Lane, which works with the Defense Department to provide consumer education for service members and their families and to advocate on their behalf. She also helps the Better Business Bureaus across the country to reach out to military communities.