The department of defense has introduced a draft proposal capping payday loan interest at 36%. The potential law has recently been published in the Federal Register and the 60 day comment period has begun. I'm generally not much for Congress legislating things into submission, but something needs to be done about these shops. Capping rates at 36% would be a drastic cut from what most of these operations now charge.The people who have helped push this legislation to the point where it will be considered claim that service men and women are particularly susceptible to these programs. While that may be true, I don't see why this legislation isn't extended outside the services. For every armed service member who falls behind and uses one of these services there are probably at least two or three average Americans. Service men and women nobly provide for our country, but they make a salary that is above the poverty line and have access to free or reduced education expenses. If they are running into this problem what about the inner city poor that these businesses thrive off? That's the end of my rant. If you want more information about why payday loan services are at least borderline unethical visit the FTC, Wikipedia, or Responsible Lending.
Links
DOD Legislation Story
FTC Payday Loans
Wikipedia Payday Loans
Responsible Lending