Payday Loan Times

In January, Maj. Gen Mike Lehnert, commanding general for Marine Corps installations west of the Mississippi, asked the Oceanside City Council to do something about bad credit payday loan lenders who charge high interest rates to members of the military.

It’s an issue that affects military personnel across the nation. Nearly 200 payday lenders operate in the county, which is home to more than 113,000 active-duty members of the military serving at 14 bases and commands.

With quick payday advance lenders nationwide charging as much as 400 percent interest, Congress passed a law, effective Oct. 1, limiting interest rates that can be charged to military personnel to 36 percent annually.

Additionally, a regional Military Joint Task Force on Financial Health has been set up by Navy and Marine officials to address service members’ financial issues.

“Financial health is a priority regarding our sailors and Marines,” task force spokesman Brian O’Rourke said in an e-mail yesterday. “We consider financial health to be just as important as physical health or mental health. It’s also a combat-readiness issue for us.”

This check-cashing service is among 22 providers of fast payday loans in Oceanside, which has the second most among cities in San Diego County. Military officials have voiced concern that safeguards are needed to protect Marines and sailors from high interest rates.

The city of San Diego has 85 payday lenders, the most in the county. Oceanside is second with 22, according to the California Department of Corporations, which licenses the businesses. Lehnert said he approached the Oceanside council for help because the city is home to so many payday lenders, which Camp Pendleton Marines use for short-term loans until their next paycheck.

On Monday, the city made its first response.

The Planning Commission voted to recommend that the City Council pass an ordinance requiring lenders to get a special operating permit. The commission recommended that instant cash loan companies not be allowed within 1,000 feet of a similar business or 500 feet of a home, church, park or school.

Similar regulations
The law is similar to regulations for massage parlors and pool halls.

Although San Diego has the most payday lenders in the county, it has no plans for regulations, city spokesman Kevin Klein said.

Chula Vista has considered regulations, but its Planning Commission has not made any decisions, assistant city planner Joe Hare said.

Lehnert said Marines can’t focus on their duties if they are worried about debts as a result of taking out any cash loans.

“I definitely want to thank the Oceanside City Council and Planning Commission for their actions and their support of our military and their families,” he said in an interview yesterday.

“We are not targeting any particular lending industry. If the lending institutions keep their interest rates below those generous levels (provided in the new federal law) and do not engage in other prohibited practices that negatively affect the readiness of our Marines and sailors, we don’t have an issue.”

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