Congress Reaches Agreement on Military Payday Advance Cap
By J.J. CameronPayday Loan Writer
An agreement reached in Congress would finally limit interest rates on cash loans to military service members.
The measure imposing a 36 percent cap on the annual interest rate for payday loans to service members or their spouses will be included in the defense authorization bill.
It has the backing of the Pentagon and consumer advocates that had believes such cash advance loans were dangerous to the armed forces.
As we've outlined across The Times, payday lenders offer short-term loans against borrowers' paychecks and charge fees. Borrowers that cannot repay the loan by the next payday often "roll over" the loan repeatedly, leading to more charges.
Industry officials say quick cash loans help soldiers in need and that military personnel will be forced to seek high-cost loans from unregulated Internet lenders. Meanwhile, Pentagon officials say spiraling debt has caused some service members to lose security clearances or become distracted from their missions.
