Just how big of a problem is predatory lending that specifically targets American military members and their families?
Frankly, the scourge wrought by payday loans and other egregiously lender-friendly loan instruments is huge. President Obama put a spotlight on select lenders in a speech he delivered last month, stating that they are "exploiting loopholes to trap our troops in a vicious cycle of crushing debt."
And some of those loopholes look big enough to drive a truck through. A media story chronicling the singular ways in which predatory lenders target the nation's military notes that legal provisions seeking to limit the most usurious lending practices are easily circumvented by lenders who simply create new products. Rolling lines of credit -- which are not addressed in existing law -- are one such offering.
The pay-back exactions of such products truly sting. The Military Lending Act passed by Congress in 2006 posited an interest ceiling rate of 36 percent for loans taken out by military members, but the morphing and elusory loan products created by manipulative lenders have reportedly shackled some borrowers with interest rates as high as 700 percent.
As noted by an official with the Consumer Financial Protection Bureau, bad loan products that service members avail themselves of to deal with short-term debt obligations are ultimately "hurting the nation's defense," given that they undermine military readiness.
And, of course, they put a staggering debt load on the shoulders of military borrowers, who often don't know where to turn for assistance when repayment duties become onerous -- and sometimes flatly insuperable.
Although service members are a favorite target of predatory lenders, they are hardly an exclusive audience. Debtors from every demographic in California and nationally can fall prey to unethical and often illegal lending practices.
A proven debt-relief attorney can answer questions and advocate diligently on behalf of any consumer -- civilian or military -- with debt-related concerns that require a legal response.
Source: The Wall Street Journal, "U.S. to expand Military Lending Act in effort to protect service members," Gordon Lubold and Byron Tau, July 21, 2015