Consumer Group Organizes Military Payday Loan Meeting in Kansas
By J.J. CameronPayday Loan Writer
The issue of military payday loans is on the docket in our nation's captial - but it will soon be discussed in Kansas, as well.
As The Wichita Eagle reports, a local grassroots group again taking on the industry. Indeed, Sunflower Community Action is inviting the public to a meeting next week to discuss faxless payday loans and car title lending, particularly to military personnel.
"A lot of payday lenders are huddling up around bases," said J.J. Selmon, community organizer for the northeast chapter of Sunflower. "In a lot of states, payday lending places are open 24 hours a day around military bases."
The August 31 meeting is open to the public and Sunflower would especially like to hear from military personnel who are concerned about these dangerous, fast payday loans. Selmon has been corresponding with Martin Dempsey, an Army liaison in Kansas who deals with quality of life issues for the military. He's a contractor for the Department of Defense.
A Defense Department report to Congress urges lawmakers to set a cap of a 36 percent annual percentage rate on extensions of credit, including payday loans, made to service members and their families. The report also asks Congress to prohibit lenders from giving money to service personnel without regard for the member's ability to repay.
Specifically, the report says to "prohibit lenders from using checks, access to bank accounts and car title pawns as security for obligations." It also notes a Center for Responsible Lending analysis that showed that active-duty military personnel were three times more likely than civilians to take out a payday loan.
Just under 50 percent of enlisted service members are less than 25 years old, typically without a lot of experience managing finances. Most do not have a cushion of savings to help with emergencies. Is it really any wonder they are prime targets for supposedly low cost payday loan providers?
In defense of payday loans: Not everyone is on Sunflower's side. Lt. Ashley Conner at McConnell Air Force Base said personnel there do not appear to have a problem with payday advance lending. Whitney Damron, a lobbyist for the Kansas Payday Loan Association, said provisions to Kansas' law regulating payday lending specifically help protect military personnel.
Kansas statute 16a-2-405 says that payday loan lenders may not garnishee a military borrower's wages and must defer all collection activity against a military borrower who has been deployed. Lenders also may not contact any person in the borrower's chain of command in an attempt to collect a debt.
"The payday loan industry from my experience has been very responsible and respectful of payday loans in regard to military bases," Damron said.
Sunflower, he said, "wants to foreclose borrowing opportunities to consumers. I'm still waiting to see when they're going to open up their own lending institution. They are attempting to limit consumer choices."
Expect a fiery debate regarding cash loans at the meeing to end August.
