Tuesday, August 16, 2005

Payday loan debt has become so widespread in military organizations that the U.S. Department of Defense determined that the astronomical rates are affecting military readiness. To counteract the adverse impact of quick cash loans, Military organizations and Florida Attorney General Charlie Crist have organized a program of low-cost loans to servicemen and women.

How low cost? Navy/Marine Corps Relief Society and counterparts serving the other branches are providing zero percent interest loans.

“Zero interest loans are a godsend and a financial lifeline for military families,�? said Crist. “Thankfully there are organizations who care about the well-being of those who give so much to our country.�?

Attorney General Crist urged the Florida Legislature to take a close look at the statutes to ensure that the men and women in uniform are being protected. Current Florida law allows an effective annual percentage rate of 390 percent. Some states have no statutory limits on payday loans.

On June 30, the Attorney General issued a consumer alert to military families advising them to avoid “predatory lenders�? and offered tips on how to avoid becoming involved with them. The alert also revealed another option for military families – the Servicemembers Civil Relief Act – which entitles personnel on active duty to more favorable loan repayment requirements.

However, these protections are available only for loans received by personnel prior to the time they are called to active duty. The zero percent interest loans expands coverage to more members of the military.

The June 30 alert also stated that certain payday loan providers were under investigation for possible illegal activity. The investigation is ongoing.

This entry was posted on Tuesday, August 16th, 2005 at 9:51 am and is filed under National.