Protecting Soldiers from Predatory Lenders

STRAIGHT TALK WITH SAM
Volume 5, Issue 13
Protecting Soldiers from Predatory Lenders
March 28, 2005

If you put a dollar in a savings account today, you could go back to the bank at the end of the month and expect a penny or two to have magically appeared. The account grows every month as you earn more interest on more money gradually getting bigger.

It works the same for you and I when we owe money. The interest rates cause the amount we owe to grow much quicker. Luckily though, we don't face an interest rate of 300%. That sort of outrageous rate makes it almost impossible to ever pay back all of your debt.

Yet this is exactly what many young soldiers are facing today. Companies specifically target soldiers and offer them short term, high interest loans which seem like quick cash. Interest rates quickly rise and automatically roll over until they are so far in debt that they cannot get out of it.

I think we can do better for our troops. I have introduced legislation that caps the Annual Percentage Rate that these companies can charge soldiers and their families. You can still lend soldiers money, but you cannot charge 300%. This bill would limit those companies that seek to target our troops.

Military leaders have identified this lending practice as a problem for U.S. troops. That's why groups like the Association of the US Army, the Fleet Reserve Association and many others support this bi-partisan, common sense legislation. I don't think that soldiers who protect us overseas should be taken advantage of at home.

http://www.house.gov/graves/straighttalk/2005issue13.htm