Legislate and Educate
By AMY L. WITTMAN, Editor in Chief
SEAPOWER
THE OFFICIAL PUBLICATION OF THE
NAVY LEAGUE OF THE UNITED STATES
Volume 50, Number 9, September 2007
Many young service members live
paycheck to paycheck,
trying to meet family
financial obligations
that often become a
heavy burden during
deployment or in times
of emergency. Others
ment loans Congress
meant to cover.”
— living on their own
for the first time with
much of their housing,
food and clothing expenses covered
— get caught in a downward spending spiral with what they see as disposable income. They are prime targets for unscrupulous lenders.
Seapower
correspondent Amy Klamper (on page 48) explores what these
consumer advocates
say are loopholes that
will allow payday
loan companies to
continue to target
those who are particularly vulnerable.
Type in “payday loans” in Google
and — in 0.18 seconds — you’ll get
2.4 million entries, the majority of
which link to lending companies.
Predatory lending must be
attacked on two fronts: legislation
and education. The DoD should
take full advantage of the protections the MLA has to offer.
The Talent/Nelson Military Lending Act (MLA) passed by Congress
last year is intended to protect service members and their families from
predatory and abusive lending practices. Why, then, is the Department
of Defense about to put into place
rules to interpret the law that instead may undermine it?
“This industry knows how to get
around even the tightest of regulations. They will have no problem
with the narrow definitions in the
Pentagon’s proposed rules,” Jean Ann
Fox, director of consumer protection
for the Consumer Federation of
America, said in a June 14 statement.
Congress tasked the Pentagon
with writing rules that would implement the financial protections
included in the MLA. Among other
things, the MLA imposed a 36 percent interest rate cap on credit and
prohibited loans secured by personal checks, debits, vehicle titles or
allotments. Yet, according to the
National Association of Consumer
Advocates, the DoD’s proposed
rules, which go into effect Oct. 1,
“limit the protections of the MLA
only to extremely narrowly defined
payday, auto title and refund anticipation loans. They exclude install-
The Navy has programs in place
to educate service members about
the pitfalls of doing business with
payday lenders, but more must to
done to drive home the very real
threat these firms pose to military
careers and, some would argue,
readiness. Those finding themselves
in debt should not be afraid to ask
for help from groups such as the
Navy-Marine Corps Relief Society.
Congress gave the DoD nine
months after the Oct. 1 implementation date to refine the rules. The
Pentagon should take advantage of
that extension.
PUBLISHER
John A. Panneton
ASSOCIATE PUBLISHER
Stephen R. Pietropaoli
EDITOR IN CHIEF
Amy L. Wittman
DEPUTY EDITOR
Peter E. Atkinson
MANAGING EDITOR
Richard R. Burgess
ASSOCIATE EDITORS
David W. Munns
Matt Hilburn
DIRECTOR OF ADVERTISING SALES
Charles A. Hull
PUBLICATIONS MANAGER
Kerri Carpenter
SEAPOWER CORRESPONDEN TS
Patricia Kime
Amy Klamper
Megan Scully
Roxana Tiron
PHOTOGRAPHER
Lisa Nipp
PROOFREADER
Jean B. Reynolds
DESIGN AND PRODUCTION
Pensaré Design Group, LTD.
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EX-OFFICIO: Stephen R. Pietropaoli, Amy L.
Wittman, Janet A. Mescus, Joseph C. Sacks
