Sen. Talent's Plan to Stop Predatory Lenders from Targeting Our Troops Signed into Law

Sen. Talent's Plan to Stop Predatory Lenders from Targeting Our Troops Signed into Law

U.S. Senator Jim Talent (R-Mo.) today announced that his provision to stop predatory lenders from targeting servicemembers and their families was signed into law by the President. Sen. Talent's legislation, cosponsored by U.S. Sen. Bill Nelson (D-Fla.), passed the House and Senate last month as part of the Defense Authorization bill. The new law calls for a 36 percent annual interest rate cap on loans to servicemembers and their families that is consistent with the recent recommendations by the Department of Defense. Before now, there was no federal law stopping predatory lenders from targeting active duty servicemembers who, in some cases, are now paying over 800 percent APR on a loan.

"This is a great day for military families in Missouri and throughout the country," said Sen. Talent, member of the Senate Armed Services Committee. "For the first time ever, we have new protections for our troops and their families that will help tackle the growing predatory lending problem that has impacted our operational readiness. This new law protects those servicemen and women who put so much on the line to protect us."

Predatory lenders have targeted active duty servicemembers who are now paying an average of 390 percent interest on a loan. Missouri has the unfortunate distinction of having a relatively large number and high density of payday lenders around its largest military base, Fort Leonard Wood in Pulaski County. Sen. Talent's legislation applies only to military personnel and their families and offers national protection from abusive lenders including predatory payday lenders. The measure establishes a federal ceiling at 36 percent APR and does not prohibit states from adopting legislation with a lower limit.

More than 80 military, consumer, and civil rights groups support the legislation including: the Association of the United States Army (AUSA), Military Officers Association of America (MOAA), Veterans of Foreign Wars (VFW), Navy League of the United States (NLUS), Air Force Association (AFA), Marine Corps League (MCL), American Legion, and Fleet Reserve Association (FRA), National Association for the Advancement of Colored People (NAACP), Center for Responsible Lending, Consumer Federation of America, and Institute of Consumer Financial Education.

http://www.talent.senate.gov/News/singleNews.cfm?NewsID=1818