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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGood news: To protect service members, Defense Department plans broad ban on high-cost loans
The Department of Defense, attempting to thwart the ever-changing tactics of high-cost lenders, plans to dramatically broaden a federal law that sought to protect service members by capping the interest rate on loans made to troops.
When the Military Lending Act was enacted in 2007, it narrowly focused on how much interest lenders could charge on two types of loans: payday and auto-title. But as ProPublica and Marketplace reported last year, high-cost lenders easily circumvented the law, peddling credit from stores that often line the streets near military bases. In a newly released report to Congress, the Defense Department acknowledged that the law has proven inadequate and said it is working on new, more comprehensive rules.
The report, completed in April, said a survey of service members found the use of high-cost loans is widespread. Under current rules, the Military Lending Act (MLA) caps certain categories of loans at a 36 percent annual percentage rate. But the Defense Departments survey found that 11 percent of service members reported taking out a loan above that limit in the past year.
MORE HERE: http://wonkynewsnerd.com/protect-service-members-defense-department-plans-broad-ban-high-cost-loans/
When the Military Lending Act was enacted in 2007, it narrowly focused on how much interest lenders could charge on two types of loans: payday and auto-title. But as ProPublica and Marketplace reported last year, high-cost lenders easily circumvented the law, peddling credit from stores that often line the streets near military bases. In a newly released report to Congress, the Defense Department acknowledged that the law has proven inadequate and said it is working on new, more comprehensive rules.
The report, completed in April, said a survey of service members found the use of high-cost loans is widespread. Under current rules, the Military Lending Act (MLA) caps certain categories of loans at a 36 percent annual percentage rate. But the Defense Departments survey found that 11 percent of service members reported taking out a loan above that limit in the past year.
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Good news: To protect service members, Defense Department plans broad ban on high-cost loans (Original Post)
LuckyTheDog
Jun 2014
OP
MineralMan
(146,329 posts)1. And then, there were the 6 for 5 fellow enlisted men.
Borrow 5 bucks the week before payday, and pay back 6 on payday. I never calculated the annual interest on that deal, but I'm afraid I borrowed 5 bucks that way a bunch of times while in the USAF.
And I was happy to do it at the time.
Turbineguy
(37,365 posts)2. The repubs will never go for that.
Their friends thrive off taking advantage of military families.
Tierra_y_Libertad
(50,414 posts)3. Does that include the barracks loan sharks?
Talk about high interest rates. $10 for $20 come payday and you'd damn sure better pay up.