ONCE AGAIN MEMBERS OF OUR ARMED FORCES are coming under fire from the enemy. This time though it's not from terrorists or insurgents in a foreign land. This enemy is homegrown and known as the banking industry. In particular, the shady side of the banking industry known as "payday lenders." These thieves are targeting young inexperienced servicemembers around the country and some of our nation's finest are paying a dear price for it. Some "worst case" scenarios have played out here in California with unsuspecting servicemembers paying up to 400% in interest according to the Center for Responsible Lending.
Read the story below and at the end of it, learn how you can help by clicking on the link for the Center for Responsible Lending. These men and women defend us around the world on a daily basis. One way we can help them is by strongly and loudly making our voices heard and helping to put an end to this obscene practice by payday lenders.
Payday Lenders Sabotage Military in CA
PR Newswire
SACRAMENTO, Calif., Aug. 30 /PRNewswire/ -- Predatory payday lenders will continue to gouge soldiers, sailors and aviators in California with more than 400 percent interest on loans thanks to the payday-lending industry's intense lobbying of state legislators.
High-ranking Navy and Marine officers, consumer groups and their allies in the legislature tried to ban this sort of predatory lending, but it looks like they will fall short as the legislative session ends this week.
"We may have missed a chance to keep our service people out of the clutches of predators," said Paul Leonard, director of the California office of the Center for Responsible Lending, a nonprofit that goes after predatory lenders.
"Our legislators could give them some financial body armor, but it doesn't look like that will happen."
Payday lenders make borrowers sign a postdated check for, say, $300 to borrow $255 for two weeks. When borrowers can't repay the principal, they roll the loan over for another two weeks -- and another $45. In California, the average payday borrower winds up paying $660 on a $255 loan.
These predators cluster around the nation's military bases seeking to hook young, cash-strapped, financially inexperienced soldiers and sailors on this expensive kind of debt. Military people are three or four times more likely to be victims of payday lenders, the Pentagon says. And as the industry grows fat on loans to soldiers and sailors, the problem gets worse.
"We're hearing more and more stories from sailors who get themselves in a cycle of debt," says Navy Capt. Mark Patton, who testified for the military at a hearing of the Senate Banking, Finance and Insurance Committee.
Fed up with these predations, the Pentagon issued a report earlier this month saying these predators bankrupt and ruin young soldiers. And that wasn't all. Payday lenders are hurting the military's ability to defend the country.
"Predatory lending," the report said, "undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all volunteer fighting force."
It called for a 36-percent ceiling on interest on payday loans to members of the military -- the same cap many states impose in their usury laws to ban loan sharks.
Assemblyman Ted Lieu (D-Torrance) then added the 36-percent cap to a bill he introduced that had already passed the lower house of the legislature.
The bill was about to go to the floor of the Senate for a vote when the banking committee called it back. At this point the committee had a chance to help the people who protect this country. Instead they went AWOL: They stripped the 36-percent interest-rate cap.
The military, hoping to get at least some protection for service members, is supporting the watered-down bill, but still wants the 36-percent cap.
It may get that, instead, from Congress. U.S. Senators Jim Talent, a Missouri Republican, and Bill Nelson, a Florida Democrat, got the 36-percent cap passed in an amendment to a defense bill. While the payday lobbyists stalk Capitol Hill, the amendment awaits its fate in a House-Senate conference committee.
"We're hoping Congress will stand up to the payday industry if California legislators will not," said the Center for Responsible Lending's Paul Leonard. "Our service people deserve far better than financial ruin --or trying to survive in a war zone while they're fretting about how they'll pay next month's bills."
For more information: Michael Flagg, (202) 349-1862 or mike.flagg@responsiblelending.org ; or Sharon Reuss, (919) 313-8527, sharon.ruess@responsiblelending.org
About the Center for Responsible Lending
The Center for Responsible Lending www.responsiblelending.org is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help www.selfhelp.org one of the nation's largest community development financial institutions.
Originally posted 9/28/06 on Yahoo 360
3 comments:
If some act of government could inlist a fine for these types of company making loans on government pay checks.. If they get caught doing it slap them with a 20 thousand dollar fine. I know all in all it is a persona right to be able to get a quick loan or such, but when a complany like this targets one group, then they need to be stopped. Sadly in the world with the way it is, many people in general will never learn to live within their means. I am not really a mean spirited person, not at all, but lately it seems there is a serious issue all over with haveing to SHOW what we have or put up false fronts and then you see the lines in these types of places growing longer an dlonger each week. Just leaving within a persons means would run many of these businesses out of business. I live in a small mill town in the south, pop appx:15,000 and believe it or not there are 5 of these places in our town. They feed of the folks here, But then again, maybe it all comes right back down to economics. I was in high school in the 80's and we had to take a form of economis class, we all had to learn to budget and more so to survive off of what we had, Maybe many need a refresher course?? Excellent blog.. great to think about..
peace
monk
Thursday September 28, 2006 - 11:40pm (EDT)
Grrrrr...this makes me angry. These poor kids don't know what they're getting themselves into.
Friday September 29, 2006 - 09:54pm (EDT)
i've always preached to my troops ur better off borrowing money from a begger's cup than these guys....anyone who w0uld pray on our soldiers are *%*%*&$*....I also wanted to say that I do not believe in credit cards or loans of any type. I've never had a debt in my life so i dont understand the need for it...if u cant buy it...dont!...debit cards are different as long as there is money in the bank....but robbing peter...(or in this case above...peter robbing paul back)....to pay paul is not a debt solution. The solution here is to teach our children how to keep books, write checks, pay bills, and the value of a dollar at the store. Each of my children in their senior year of highschool (before leaving for college)..has had to keep the family books and pay the bills for one year...to learn to think before impulse buys or starting a family!)...
US has gotten spoiled in their spending habits....those who spend have only debt...those who save has security later in life when it is needed. fancy hair, french nails, and expesive jewels and clothes are for ppl who need to impress others to gain attention....i believe in Achnucht...(simplicity)...and of course my man loves my natural look....i'm a real person and dont need expensive things to feel otherwise!!
....A soldier at war may also come home to big bills unpaid and debt collecter calling...why?....because the wife or husband at home has not kept to the 'teamwork' of paying the nessecities first and spending on silly selfish stuff in tact....also, a soldier's pay stinks....let us vote to raise that first thing...after all a higher risk US job pays more than a low risk job..does it not?..So what is a man or woman's life worth to the Boss(Usa)..let us not forget who owns this nation...."We The People" run this nation....changes can come about if everyone would stop 'sweating the little stuff' and were to get a real idea on the bigger more death defying issues....
hugs all! janie
Ps. My prayers to all children tonight; who are hungry or scared and may God protect and keep them fed....feed a hungry child......its our duty!!......Amen!
Thursday October 5, 2006 - 02:02am (BRT)
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