USA Today: Lenders Prey on Military Families with Ultrahigh-Interest Loans

[BurtWorm]

http://www.usatoday.com/news/nation/2006-08-30-military-loans_x.htm

Pentagon sees risk in troops' loan debt
Updated 8/31/2006 10:07 AM ET
By William M. Welch, USA TODAY
As many as one in five members of the armed services are being preyed on by loan centers set up near military bases that can charge cash-strapped military families interest of 400% or more, a new Pentagon report has found.

ON DEADLINE: Read the full report

Steep lending charges have long plagued servicemembers, but the problem has become a more urgent concern to the military as it has struggled to fill its ranks during the Iraq war. That's because debt troubles can keep troops from going overseas.

"We're seeing a growing trend of folks who are not eligible to deploy because of financial problems," says Capt. Mark Patton, commander of Naval Base Point Loma in California. Patton says debt problems can cost some servicemembers their security clearances.

The report says "payday loan" stores (so named because their loans are often due on a borrower's next payday) have sprung up by the thousands around military bases and elsewhere in the past decade.

Lenders typically charge $15 to $25 per $100 loan for two weeks, and most loans are extended for several weeks. The report says the average loan is $350 and has an annual interest rate of 390% to 780%. The average borrower, it says, pays back $834 for a $339 loan.

The report cites estimates 13% to 19% of servicemembers — at least 175,000 people — took out high-interest, short-term loans last year. It said nine out of 10 loans go to borrowers who take out five or more over a year.

[demnan]

1. I just wrote a real snotty letter to John Warner

The Republicans control the White House, the Senate, the House and the Supreme Court and they can't even pay the military a living wage. I also pointed out that "involuntary" deployment was in fact a draft. told him this was worse than "Maccaca".