Senate works to Protect Soldiers from Predatory Lending
March 30, 2005
On March 30th, the Senate Veteran Affairs and Military Installations Committee unanimously voted to regulate payday lenders doing business with members of the Armed Forces and their families.
Written by Senator Eliot Shapleigh, BRAC newsletter
On March 30th, the Senate Veteran Affairs and Military Installations Committee unanimously voted to regulate payday lenders doing business with members of the Armed Forces and their families. Senate Bill 1479, by Shapleigh, prevents payday lenders from taking certain actions that are particularly harmful with respect to members of the military. Lenders are prohibited from:
garnishing military wages,
conducting any collection activity against a military customer of their spouse when the military customer is in combat deployment, and
contacting a commanding officer in an effort to collect.
Lenders are bound by the terms of any repayment agreement they negotiate through military or third party credit counselors, and agree to honor any statement by a military base commander that a specific payday lending location is off-limits to military personnel.
Military personnel are prime targets for payday lenders because they are paid regularly, never get laid off, and face penalties for failing to repay debts. Moreover, the relative youth of military personnel often leaves them with a lack of sophistication in financial matters so that they can easily find themselves living paycheck to paycheck, often forced to resort to short-term loans to make ends meet. A recently released report, Predatory Lending and the Military: The Law and Geography of "Payday" Loans in Military Towns, illustrates how payday lenders target military communities.
To read the proposed legislation, SB 1479,
To access the payday lending report.
Related Stories