Bush: Soldiers Won't Pay More Than 36% Interest

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Consumer loans to service members will be limited to 36 percent annual interest next year under a law President Bush signed Tuesday that is aimed at storefront lenders clustered around military bases.

And you thought our president wasn't taking care of the troops. Shame on you!

The law is a response to "payday advance" stores that market short-term loans, typically charging $15 or $20 per $100 loan for periods of up to two weeks or a borrower's next payday.

Borrowers generally renew loans several times before paying them off, and the fees result in effective annual interest rates of 400 percent or more, a Defense Department study concluded.

Military officers pushed for the law, saying the loans saddled low-paid enlisted men and women with debts that ruined their finances.

"That's why the 36 percent rate cap means we're getting out of the military business," said Steven Schlein, spokesman for the Consumer Financial Services of America, a group whose members operate half the 22,000 short-term lending stores across the U.S.

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Posted by MoT on 2006-10-19 08:29:12
Getting out of the business?! My Ass! 36% is an INCREDIBLE return on an investment.
Posted by wizeGurl on 2006-10-20 01:11:53
Not when you're used to a 400% return.
 

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