Good news: Senate reins in military predatory lending
One of the few bright spots in the Defense Authorization Bill passed by the Senate last week (SB 2766) was an amendment including protections for military families from predatory lending abuses.
Senator Jim Talent (R-MO) and Senator Bill Nelson (D-FLA) led the way in pushing for the amendment, which was included in the bill that passed the full Senate late Thursday.
This is a big issue for those in military services -- which, as the Institute showed in a recent research study, are disproportionately based in the South. The Center for Responsible Lending describes the problem:
Predatory lenders are targeting young military families, entrapping them in lending schemes that strip them of their hard-earned pay at annual interest rates of 400 percent and higher. One in five active-duty military personnel were payday borrowers last year. Predatory payday lending costs these military families over $80 million in abusive lending fees every year.
The Talent-Nelson Amendment will limit annual interest rates to 36 percent for loans made to military families, allowing our soldiers to keep more of their hard-earned pay. Let's hope Congress enacts this into law -- and better yet, moves to stop loan sharking across the board.
Chris Kromm is executive director of the Institute for Southern Studies and publisher of the Institute's online magazine, Facing South.