Washington, D.C. — Military and consumer finance experts at the Center for American Progress applauded an announcement from President Barack Obama, made today at the annual Veterans of Foreign Wars National Convention, to put in place stronger rules to protect military service members from high-cost loans.
Lawrence J. Korb, CAP Senior Fellow, released the following statement:
Congress and the Pentagon have been sounding the alarm on predatory lending to our troops for more than a decade. The president’s action today will close major loopholes that allowed unscrupulous lenders to advance loans to service members at exorbitant interest rates. It took a strong, unified effort from the Department of Defense and the Consumer Financial Protection Bureau to help prevent service members from getting trapped in a cycle of debt that can threaten security clearances and military careers.
Joe Valenti, CAP Director of Consumer Finance, added:
Whether made to members of the military or to civilians, loans that exploit borrowers are a drain on families and communities. Four out of five payday loans in America are not paid back without reborrowing or refinancing, and tens of thousands of cars are repossessed each year when struggling borrowers are unable to pay back high-cost auto title loans. All Americans, but especially our service members, must be protected from predatory lenders in the financial marketplace.
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For more information on this topic or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.