Senator Jim Talent, R-MO, gave a preview of his Fourth of July speech, replete with his stirring support for the flag-burning amendment. But the speech started with something far more immediate in the lives of many military families: The senator and his co-sponsor Bill Nelson, D-FL, managed to amend the Armed Services appropriations bill last week to insert a provision to protect military families from predatory lenders. This is a Fourth of July speech worth cheering.
The Talent-Nelson amendment is the first real progress at the national level since payday lenders have descended on hard-pressed working families like a plague of locusts. Effectively freed from usury caps that once protected borrowers, the payday lending industry has grown into a multi-billion dollar enterprise by lending money at rates that routinely reach 800%–or higher. For the first time, the U.S. Senate has said, Enough!
According to the Center for Responsible Lending, one in five active-duty military personnel were payday borrowers last year. They estimate that predatory payday lending costs these military families over $80 million in abusive lending fees every year. The Talent-Nelson amendment limits interest charged to military families to 36%–and it even adds a provision to permit states to lower the rate even further.
Of course, payday lending isn’t limited to military families. Payday lending costs American families about $3.4 billion annually. Millions of families take out what are advertised as two-week loans, only to become ensnared in some of the highest interest rate lending anywhere in the world.
For years, Congress has been willing to look the other way as these lenders tricked and trapped families who needed a little cash to make ends meet. Perhaps once Congress acknowledges that 800% interest shouldn’t be legal when the borrower wears a military uniform, the next step will be to make it illegal to charge that much to someone wearing a janitor’s coveralls, a firefighter’s boots, or any other outfit.
With all the over-heated rhetoric about who really supports the military, it is good to see someone step in to help fix a terrible problem. I can’t find a single national press story about it, but, in my book, this is what it means to support military families.
When Senators Talent and Nelson stand up on the Fourth, I’ll be cheering.
