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PROTECT OUR TROOPS

FROM LOAN SHARKS!

ASK SEN. DOLE TO WITHDRAW 

MILITARY LOAN AMENDMENT SA 1523

Payday loans are short-term, predatory 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.  The average NC payday borrower is flipped 13 times, staying in payday loans for 7 months of the year, and paying $885 to borrow $255. 

You can take action today to protect our troops from unfair lending.  Send a letter via e-mail to Sen. Dole, asking her to withdraw this amendment.  Just follow the below directions.  Let Sen. Dole know that 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 a form to send e-mail to U.S. Senator Elizabeth Dole:

E-mail Sen. Elizabeth Dole (R-N.C.)

E-mail another US Senator

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.

5. You can also call Sen. Dole's office directly at (202) 224-6342 to voice your opinions on this issue.

SAMPLE FORM LETTER: 

Sen. Elizabeth Dole

U.S. Senate

555 Dirksen Office Building

Washington, DC 20510

Phone:  (202) 224-6342

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

Dear Senator Dole:

I am writing to urge you to withdraw your amendment (SA 1523) to the bill S. 1042, to authorize appropriations for fiscal year 2006 for military activities of the Department of Defense.

This amendment would undermine existing consumer protections against predatory lending for military borrowers.  Why did you withdraw the original version of this amendment that would have capped the rates charged for loans made to military personnel and their spouses at 36% APR?  The original version of your 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, your 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 your amendment, 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.

The average NC payday borrower is flipped 13 times, staying in payday loans for 7 months of the year, and paying $885 to borrow $255.  Predatory lending's destructive effects on communities have been confirmed by NC state regulators, several independent studies, the FDIC, and even predatory lenders’ own company data.

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

Sincerely,

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