AP: Pentagon targets payday lenders [View All]

[Eugene]

Thursday, August 31, 2006 · Last updated 12:06 p.m. PT

Pentagon targets payday lenders

By THOMAS WATKINS
ASSOCIATED PRESS WRITER

Worried that too many members of the military are falling to victim
to ruinous interest rates and getting into deep financial trouble,
the Pentagon is backing an effort in Congress to slap a nationwide
cap of 36 percent on payday loans to troops. An increasing number
of states are taking steps, too.

In a report released August, the Defense Department estimated 225,000
service members - or 17 percent of the military - use payday loans.
The Center for Responsible Lending, a nonprofit group seeking stricter
industry controls, says that one in five service members took out such
a loan in 2004, and that someone who borrows $325 pays an average
of $800 in charges.

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"You are not doing a service to an individual who is already short on cash,
so he's living not just paycheck to paycheck, but from almost paycheck
to almost paycheck," said Capt. Mark D. Patton, the commanding officer
for Naval Base Point Loma in San Diego, where LaForce is stationed.

Patton said the Navy is worried that payday loans are contributing
to the surge in the number of sailors who cannot be sent into duty
overseas because of financial problems.

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Full article: http://seattlepi.nwsource.com/national/1110AP_Military_Payday_Loans.html