New Law Makes Payday Loans to Military Members Illegal
Saturday October 28, 2006
One of the provisions of the FY 2007 Military Authorization Act, makes it illegal for creditors to grant payday loans and car title loans to military members.
The change also prohibits charging more than 36 percent interest to military borrowers. Fees, service charges, renewal charges, credit insurance premiums or any other product sold with the loan must be included when calculating the interest rate. In the past, there have been "horror stories" of military members paying up to 800 percent interest by using such gimmicks.
The change also prohibits charging more than 36 percent interest to military borrowers. Fees, service charges, renewal charges, credit insurance premiums or any other product sold with the loan must be included when calculating the interest rate. In the past, there have been "horror stories" of military members paying up to 800 percent interest by using such gimmicks.
Comments
Sure, there are horror stories. There are also countless stories about how payday loans, when used responsible, have helped people out of a jam. Unfortunately, the new law makes lending to military folk impossible because of the level of defaults. So now, military must go back to bouncing checks, at the cost of $50-60 PER CHECK. Payday loans are much cheaper if used responsibly.
I’m sorry….. “the military must go back to bouncing checks?”
MUST? What happened to paying one’s bills, or living within one’s means?
iam with you virginia
I’m glad that you have never had an unexpected finance expence that has left you a little short till the end of the month. I guess its my fault my kids are going back to school and my lease just ended last month and we had to move. Pay day loans are a temporary get out of jail free card. both myself and my wife work however we are a little short and a few hundred bucks would have been great till the end of the month. But instead someone i will never meet decided who i can borrow money from. What a bunch of crap. Have fun eating from your silver spoon