North Carolina Praised for Military Payday Loan Protection
By J.J. CameronPayday Loan Writer
As the Department of Defense focuses on the issue of military payday loans across the country, one state has been cited as providing ample protection for armed forces members from these cash advances:
North Carolina.
At the same time, the department says Congress and individual states could do more to prevent the practice of targeting troops with such faxless payday loans and regular payday loans.
The report, released this month, was requested last year by U.S. Sen. Elizabeth Dole, a Salisbury Republican and member of the Senate Armed Services Committee. Predatory lending includes practices such as bad credit payday loans, car loans, rent-to-own programs and other temporary loans that can charge service members triple-digit annual percentage rates.
But in 2001, North Carolina became one of a few states to prohibit payday advance lending companies. The study said the armed services should do more to educate service members about predatory lending practices.
It added that"education does not trump the marketing of these loans and the easy availability of quick cash with few questions asked." The report recommends that Congress and individual states put caps on annual percentage rates, require more disclosure, force lenders to consider borrowers' ability to pay and allow service members legal recourse in disputed cases.
Dole said she will look closely at the report's recommendations.
"This report presents a powerful picture of the extensive problems brought about by predatory lenders that target military families," she stated.
The senator said she plans to introduce legislation based on the department's report. The chairman of the Senate's banking committee, of which Dole is a member, has pledged to hold a hearing on the issue of military cash loans.
