Promoting Ethical Profits and Responsible Commerce
|
|
|||
Promoting Ethical Profits and Responsible Commerce |
||||
| Home Initiatives: | Tell your Federal Legislators what you think about payday lending!
LOCAL COMMUNITY LEADERS, CONSUMERS AND CITIZEN GROUPS URGE SENATOR McCAIN AND MEMBERS OF THE HOUSE TO SUPPORT LEGISLATION PROTECTING MILITARY FAMILIES FROM PREDATORY LENDERS Community leaders, Consumer and Citizen groups from Arizona today call on Senator McCain to support legislation to protect military families from payday lenders who trap borrowers in a vicious cycle of triple-digit interest rate debt. The legislation, which would cap the interest rates that can be charged on loans to members of the military, has passed the Senate. Senator McCain will be a member of the committee that decides whether this protection becomes law. “Military families near Davis Monthan and Luke Air Force Base need Senator McCain’s help in protecting them from companies that target them with exorbitantly priced loans,” said, Davis Monthan 50 civic support group President, Bruce Dusenberry. Payday lenders outside the Arizona’s bases charge 390 – 460 percent for quick cash loans. According to the recently released Department of Defense report on predatory lending practices directed at members of the armed forces and their dependents, “A clear, unambiguous rate ceiling is justified given the high fees, interest and other charges associated with loans to service members [reviewed in the report ] and the impact of those loans on military readiness and troop morale.” “Predatory lending doesn’t just ravage service members and their families. It also traps thousands of non-military Arizona consumers in an unending cycle of debt” said Southwest Center for Economic Integrity Board President, Holly Lachowicz. Senators Talent (R-MO) and Nelson (D-FL) amended the Defense Authorization (Senate Bill 2766) to cap interest rates on loans to service members at 36 percent – the same cap imposed by many states to thwart usury and loan sharks. The amendment also covers car-title lending and other high-cost loans. Car-title loans make borrowers pledge the clear title to their car as collateral and charge up to 300 percent interest. A House-Senate conference committee must now approve the amendment for it to become law. Community leaders Consumer and Citizen groups are urging committee members to eliminate predatory lending practices targeted to military personnel and their families by voting for the amendment. Senator McCain has been appointed to this conference committee. Payday lenders base their loans on borrowers’ personal checks held for future deposit. Borrowers are likely to become trapped in repeat borrowing to keep those checks from bouncing. Since payday loans cost $15 to $30 per $100 borrowed, the typical loan costs 390 to 780 percent annual interest. The average borrower has eight to thirteen loan transactions per year, and can repay $800 to borrow $325. There are now more than 70 veterans, civil rights, and consumer organizations calling on Congress to enact the 36 percent APR cap in the Talent-Nelson amendment to protect military families from predatory lenders.
|
|
| Home : About Us : Publications : Legislative Updates : Get Involved : What's New : Worker's Corner : Contact Us : Site Map © Copyright 2006 Southwest Center for Economic Integrity All Rights Reserved | ||