Washington, D.C. — Today, the Obama administration announced stricter financial protections for personal loans made to members of the military, protecting servicemembers from predatory lending practices. In respond to the proposal, Center for American Progress Senior Fellow Patrick Murphy—a decorated U.S. Army veteran and former U.S. congressman—issued the following statement:
Today, the Obama administration has put forth much needed financial protections for our men and women in uniform and their families, who too often are entangled in predatory lending practices that lead to financial ruin. Current regulations have left servicemembers who have fallen on hard times with little protection from high-interest lenders who disgracefully target those left with nowhere else to turn. I commend the administration for bolstering financial protections for members of our military, and I look forward to the administration’s continued efforts to ensure that active servicemembers, veterans, and their families are able to find economic stability and opportunity.
The Obama administration’s proposal strengthens regulations under the Military Lending Act by closing loopholes that allowed payday lenders and other loan providers to bypass regulations intended to shield servicemembers from high-interest debt. The proposal extends a 36 percent cap on interest rates on loans to other products, including credit cards.
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