New Rule Would Cap Interest Rates on Servicemembers at 36%
It looks like the rent to own companies who base their business model on receiving high interest payments from servicemembers will need to comply with new rules capping interest at 36%:
Defense Department officials have proposed sweeping new rules that would limit the amount of interest that could be charged to service members and their spouses on most forms of credit — including credit cards.
The new rules “would reduce predatory lending practices, significantly expand the protections provided to service members, close loopholes in current rules, and help to ensure military families receive the important consumer protections they deserve,” defense officials said Sept. 26.
The Military Lending Act of 2006 was designed to cap loan interest rates for service members at a 36 percent annual percentage rate, and Congress gave DoD broad authority to define the types of loans covered under the law, with the exception of real estate loans and purchase-money loans such as vehicle loans.
In its basic concept, the move was unprecedented on a national scale for any other segment of the population. But when DoD wrote up its regulations implementing the law in 2007, it limited the types of credit covered to payday loans, car title loans and refund anticipation loans — a decision that has been routinely criticized by consumer advocates in the years since.
The new proposed rules would expand the types of credit covered to include those that are subject to the Truth in Lending Act, except for loans secured by real estate or other property, such as a loan to purchase a vehicle. Certain fees must be included in calculating the annual percentage rate. (Army Times)
You can read more at the link, but prevention by educating servicemembers on these high interest schemes should be part of the solution as well.
Ooooo… capped at a measly 36%!
It’s like telling your prison biitch you will still pimp him out to the Black Guerrilla Family for gangbangs at showertime…
…but NO MORE FISTING!
This is shocking… especially as it is selective in capping some loan industries but not others. In fact, it stinks of back door dealing.
How about the military stays out of the free market and stops pushing more restrictions upon civilians…
…and stops lazily trying to push the burden of controlling ignorant servicemembers upon private businesses instead of crafting a disciplined fighting force through actual leadership.
If “leadership” wants to control servicemembers financial exposure, simply put places off-limits that charge predatory rates. Make an order that they cannot take out high-rate loans. There needs to be no law that makes a new class of criminal among small business owners. If GI Dipshyt violates a clear order, it is none of the civilian’s concern.
But that would mean “leadership” would have to develop real discipline through applied leadership instead of making a big show of chasing the media-inspired scandal of the week with more fake training for things everybody already knows (e.g. don’t raape the female ones).
In the end, anybody so stupid or short-term in their thinking that a >36% interest rate seems like a good deal (or a 35% or a 26% or even a 16% rate), should probably not be in the military at all… except for certain jobs like Impromptu IED Disarming and Uphill Machine Gun Nest Charger.
In the end, undisciplined GIs will still want high-interest loans and will seek them out… and businesses will quietly give them to the GIs… as a law that interferes with a private transaction between two willing parties is not a good law… and, like so many other crap laws, is easily ignored and only enforced when “they want to get you” for some other (usually political) reason.
If it goes sour, the GI (and military) will gasp and blame the business for their “illegal” dealings… when the real blame goes to a lack of military leadership, a lack of military discipline, and some serious financial stupidity among military members who have no true mentors to guide them to financial responsibility with peer pressure and by example.
Shameful.
…as usual.
It saddens me, for multiple reasons, that we would need such a law. The businesses should certainly be ashamed but worse, the average citizen shouldn’t be so completely stupid.
“Most Americans are ineligible to join the military, either because they’re drug users, obese, medically unfit, failed to graduate high school, or have criminal records. The Pentagon estimates that only 25 percent of Americans are qualified.”
And of the 25% not-complete-losers who can join the military, they need a law to protect them from voluntarily taking an obvious bad deal?
Again… anybody who gets involved in this type of thing does not need to be in the military to begin with.
So who is to blame for the shocking stupidity of the majority of young Americans?
Drugs? Is it those who push the “right” to do drugs without pushing the “responsibility” of doing drugs… or is it the military which lost its will to take an otherwise-OK former pothead and make him a soldier?
Obesity? Is it those who have dumbed down playgrounds and discouraged physical activity from kindergarten because a tiny minority of kids got hurt… or is it those who push babysitting duties off on the TV while cooking only things that come in a package?
Medically unfit? Is it those who allowed dubious medical conditions such as ADHD to be used as an excuse for misbehavior instead of setting clear and consistent rules for children and making sure they follow them… or is it those who raised their kids on a diet of breakfast cereal and soda and wonder why they have medical (and behavioral) problems… or is it those who have been pumping their kids full of pills for the last 20 years to make parenting much easier?
Failed to graduate? Is it those who worry about tolerance and diversity rather than educating children in standardized useful skills… is it those who don’t have the will to segregate the animals from the students that want to learn… is it those who encouraged dependence, broken families, crime, oversexualization, glamorization of violence, the myth that there are get-rich-quick methods that are better than school?
Criminal record? Is it those who pushed revolving door justice for young career criminals that keeps them corrupting others on the street… or those who criminalized everything to the point where young foolish actions make “criminals” with no place to go but down?
Or is it the many other bad ideas that become popular because they fit a preconceived agenda about how an ideal world should work rather than the way the world does work… or satisfy the political, social, or financial greed of others… or etc.
America was good while it lasted…
…and its accomplishments and demise will be studied for a long, long time as both lessons and warnings.