The Defense Department closed some loopholes in the Military Lending Act that protects serving men and women and their families from predatory lending practices. The final version of the Act covers payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-end lines of credit and credit cards.
Research by the Department of Defense released last year found that as many as one out of every ten enlisted servicemembers continued to be targeted by high-cost credit designed to evade the Military Lending Act. DoD estimates that the final rule will reduce involuntary separation caused by financial hardship, resulting in a savings of $14 million a year or more
“This new rule addresses a range of credit products that previously escaped the scope of the regulation, compromising the financial readiness of our troops,” Work said.
Consumer advocates praised the measure.
“For nearly a decade, high-cost lenders have exploited loopholes in critical military financial protections so they can continue lending at abusive rates far above the 36 percent rate cap established by Congress,” said Tom Feltner, director of financial services at Consumer Federation of America. “The final rule published today will ensure that servicemembers and their families get the financial protections they deserve.”
PLEASE STEP UP AND DO THE RIGHT THING SUPPORT OUR VETS!