Nelson, Talent announce DOD support for new predatory lending restrictions
Media Release
August 10, 2006
WASHINGTON, D.C. - U.S. Senators Jim Talent (R-Mo.) and Bill Nelson (D-Fla.) today announced that the Department of Defense (DoD) supports their efforts to stop abusive lenders from targeting servicemembers and their families. In a report released today, the Pentagon urged Congress to enact a 36 percent annual interest rate cap on abusive loans. In June, the Senate passed a Talent-Nelson amendment that is consistent with the cap recommended in today’s DoD report. Some predatory lenders have targeted active duty servicemembers who, in some cases, are now paying over 800 percent APR on a loan.
“This DoD report concludes that predatory lenders are targeting servicemembers to make a quick buck at the expense of the livelihood and future of those defending our freedom,” said Sen. Jim Talent, Chairman of the Seapower Subcommittee. “I’m pleased that the Department supports our cap to stop these abusive lenders from preying on military personnel and their families. Predatory lending has been a staggering problem, impacting troop readiness. It’s time to enact this long overdue protection into law for our servicemembers.”
“Our military families deserve better,” said Sen. Nelson. “This report once again shows us the need to protect our service men and women from being preyed upon by unscrupulous lenders.”
The bill is now in conference committee with the House of Representatives. With the release of this report endorsing the Talent-Nelson APR cap, both senators say members of the House should have no reason to oppose the provision. Last year, Sens. Talent and Nelson requested that the Department report back to Congress legislative recommendations to eliminate predatory lending directed at the Armed Forces.
There are now more than 70 veterans, civil rights, and consumer organizations calling on Congress to enact the 36 percent APR cap in the Talent-Nelson amendment to protect military families from predatory lenders with interest rates that can average around 400 percent a year.
The coalition sent letters to members of Congress last month stating, “Predatory lending harms military readiness, placing a severe strain on military families – including enlisted personnel, reservists and the National Guard – and unnecessarily distracts officers and non-commissioned officers who should be focusing on their military mission. The Talent-Nelson amendment would improve military readiness and protect all military personnel from rate gouging.”
The military coalition of support for the Talent-Nelson amendment includes the Association of the United States Army (AUSA), Military Officers Association of America (MOAA), Veterans of Foreign Wars (VFW), Navy League of the United States (NLUS), Air Force Association (AFA), and Marine Corps League (MCL). Civil rights groups like the National Association for the Advancement of Colored People (NAACP) and consumer groups like the Center for Responsible Lending, Consumer Federation of America, and Institute of Consumer Financial Education also support the bipartisan amendment.
Click here for the text of Amendment 4331
(scroll down to the lower middle column)