Consumer Groups Team with Pentagon on Interest Rate Caps

by Mike Bevel, CollectionIndustry.com

Consumer groups are teaming up with the Pentagon not as the Boy Wonder teamed up with Batman to fight crime, but instead to intensify the lobbying push for an amendment that would rein in high interest rates on payday loans to the military. Tomato/tomahto.

Critics of the payday loan industry feel that payday loan operations are too conveniently located near military bases. This leads to underpaid soldiers seeking out payday loans, with their exorbitant terms and an ouroborusian cycle of dependence. Hence, an amendment to protect our brave men and women of the U.S. military. From themselves. While they?re protecting us. Or something like that.

?Course, when it was just Joe and Wanda Average succumbing to the allure of the fast cash payday loans afford, it was pretty not-so-much with the Pentagon and the amendments, leaving state governments to deal with payday lenders themselves.

Payday lenders are mounting their own campaign against the interest rate cap, attached to the Senate?s defense authorization measure by Jim Talent (R-Mo.) and Bill Nelson (D-Fla.). If Congress limits military payday loans to a 36 percent annual rate, the industry says it would not be able to cover expenses ? though what these ?expenses? are has yet to be clarified.

Support for the amendment, however, crosses partisan lines and has grown in the wake of the DoD report. Senate Armed Services Committee Chairman John Warner (R-Va.) congratulated Talent during a floor speech before the Senate passed its defense bill, and 11 House Armed Services Committee Democrats wrote to Chairman Duncan Hunter (R-Calif.) last week asking that the rate cap be added to the conference report.

?Predatory lending not only hurts service members and their dependents, it is having an impact on our nation?s security,? the House Democrats wrote.