Defense Department Plans Broad Ban on High-Cost Loans
After a previous law did not go far enough, the Defense Department intends to expand rules to protect service members from high-cost lenders.
·By Paul Kiel, ProPublica
The Department of Defense, attempting to thwart the ever-changing tactics of high-cost lenders, plans to dramatically broaden a federal law that sought to protect service members by capping the interest rate on loans made to troops.
When the Military Lending Act was enacted in 2007, it narrowly focused on how much interest lenders could charge on two types of loans: payday and auto-title. But as ProPublica and Marketplace reported last year, high-cost lenders easily circumvented the law, peddling credit from stores that often line the streets near military bases.