Graves Praises Predatory Lending Law

Press Release

Graves Praises Predatory Lending Law

U.S. Congressman Sam Graves praised a DOD rule taking effect today that stemmed from legislation he helped draft last session. The regulation limits the annual percentage rate charged to service members and their families on payday loans, vehicle title loans, and tax refund anticipation loans to 36 percent. The method for calculating the annual percentage rate encompasses all fees required at the time of obligation, with very few exceptions. All financial institutions - without exception - are subject to the new regulation.

"We depend on our troops for our freedom and we owe them our gratitude," said Graves. "It is unconscionable that unscrupulous lenders would exploit our troops for financial gain, so I am pleased that today we finally have a law in place to protect our men and women in uniform from predatory lenders."

Graves' bill became the Military Lending Act and was added to the National Defense Authorization Act by U.S. Senators Jim Talent (MO) and Bill Nelson (FL). Analysis showed that military bases were targeted by Predatory lenders. Soldiers were paying APRs of 400% and more on short term loans. The legislation was supported by more than 75 military, veterans, consumer, and civil rights groups.

"Today's implementation of the Defense Department's rules on payday lending is a great step toward keeping service members and their families from falling into a debt trap set by predatory lenders," said Vice Admiral Norbert Ryan, Jr., USN (ret.), President of the Military Officers Association of America. "We owe many thanks to the anti-predatory lending champions, Congressman Sam Graves and Senators Jim Talent and Bill Nelson, for their strong stance against predatory lenders who victimize men and women in uniform and hurt military readiness."

"We commend Congressman Graves for working to help pass the Military Lending Act. His leadership was essential to the process. By capping the worst class of payday and title loans at 36 percent interest, the law will stop the gouging of military families at 400 percent through this type of loan," said Michael Calhoun, President of the Center for Responsible Lending. "Our troops are dealing with enough as it is - we owe them this measure of protection from predatory lending at the very least. We must now keep a careful watch to see that payday lenders do not try to create loopholes in the law so they can once again charge 400% interest."

Graves' original bill was H.R. 97.

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