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PROTECT OUR TROOPS

FROM LOAN SHARKS!

ASK YOUR SENATOR TO OPPOSE 

MILITARY LOAN AMENDMENT SA 1523

Payday loans are short-term loans that borrowers take out against their next paychecks.  They have been widely condemned for their sky-high interest rates, which can range from 400 to more than 1000 percent.

Now, an amendment has been proposed by U.S. Senator Elizabeth Dole (R-N.C.) that would undermine existing consumer protections against predatory lending for military borrowers.  Following lobbying by the payday lending industry, Dole withdrew an earlier version of this amendment that would have capped the rates charged for loans made to military personnel and their spouses at 36% APR.

Dole’s revised amendment (SA 1523) to the fiscal year 2006 military appropriations bill S. 1042 is a toothless alternative that does more harm than good.  It scales back current consumer protections that apply to all military borrowers by applying protection to just a few loans made by some lenders.

As reported in the Army Times and other military publications, the average enlisted servicemember lives on a relatively low income and cannot afford to be taken advantage of by outrageously high interest rates.  Loan companies such as payday lenders clearly target military families by locating in base communities.

You can take action today to protect our troops from unfair lending.   Send a letter via e-mail to your Senators, asking them to oppose this amendment.  Just follow the below directions.  Let your Senators know SA 1523 will push more military families into payday loan debt traps.

1. Below is a sample form letter.  Copy (Ctrl+C) this text into your clipboard.

2. Click here to open forms to send e-mail to your US Senators:

E-mail your US Senators

3. Paste (Crtl+V) the sample text into the "your message" field on each form.

4. Include your name and address in the requested fields on each form.

SAMPLE FORM LETTER:

Attention:  Please Oppose Amendment SA 1523, which does not do enough to protect our servicemembers and their families from predatory loan debt traps.

Dear Senator:

I am writing to urge you to oppose Amendment SA 1523 to the bill S. 1042, to authorize appropriations for fiscal year 2006 for military activities of the Department of Defense.

This revised amendment would undermine existing consumer protections against predatory lending for military borrowers.  The original version of this amendment (Dole-Durbin-Nelson) would have capped the rates charged for loans made to military personnel and their spouses at 36% APR.  The original version of this amendment was similar to bipartisan legislation proposed in the House of Representatives and backed by the Military Coalition, an umbrella group of more than 30 military associations.

Now, this amendment defines military lenders as lenders that make more than 10% of their loans to the military.  This exempts most payday lenders.  Advance America, the nation's largest payday lender, would be exempt because its total military lending is less than 10% of its business.  Yet it is one of the top payday lenders to the military.

Under the terms of SA 1523, the effect of the notice required for some loans would facilitate payday lending, rather than reduce it.  The notice that would be provided could mislead the servicemembers reading it into believing there are meaningful protections applicable to those loans, when in fact there are not.

As reported in the Army Times and other military publications, the average enlisted servicemember lives on a relatively low income and cannot afford to be taken advantage of by outrageously high interest rates.  Loan companies such as payday lenders clearly target military families by locating in base communities.

Predatory lending's destructive effects on communities have been confirmed by state regulators, several independent studies, the FDIC, and even predatory lenders’ own company data.

Please oppose Amendment SA 1523, which does not do enough to protect our servicemembers and their families from predatory loan debt traps.

Sincerely,

Name: 
Address:
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