Pentagon Finds Predatory Lending Harms Troops
Department of Defense Documents Impact of Predatory Lending on Military Troops
- According to the Department of Defense, predatory lending is weakening our military.
- The Pentagon report finds that service members are caught in abusive lending schemes in high numbers, which damages their morale and threatens their security clearances.
- The report says the Department of Defense has worked hard to educate the troops, but cannot protect them adequately without strong laws, and calls on Congress to enact protective measures including a 36-percent cap on annual interest rates for loans made to military.
The DoD's report focuses on payday lending, car title lending, rent-to-own, refund anticipation loans, military installment loans and fee-based overdraft programs, and describes the impact of these practices on all branches of the military.
With this report, the DoD recognizes the faulty design of payday loans and other products that create a cycle of debt instead of helping borrowers through a shortfall. The DoD is highly concerned about the impact of this abusive lending on its personnel and the functioning of the