Feds Plan to Curb Payday Loans to Military
There are 22,000 payday loan stores in the United States, many located near military bases. But increasing debt among military personnel is a security risk, according to the U.S. Department of Defense
(Photo: Payday loan centers are being criticized by the House and Senate for offering deals that "pillage and rape consumers,” as stated by Sen. James Taylor, D-Albuquerque. Josette Herdell/KPBS )
Tom Fudge: There are 22,000 payday lenders in the USA. And in California, there are more payday loan stores than McDonald's restaurants. Payday lenders give cash to people who promise to turn over part of their upcoming paycheck. Interest rates on these loans are extremely high, and payday loan companies are considered predatory lenders that can put a borrower deep in a hole of expensive debt.
These loan companies are very common in San Diego County because one of their favorite markets are members of the military. But on Monday, a new federal law goes into effect that seeks to make it illegal for payday lenders to do business with American service people.
- Alison St John, KPBS News reporter who's been following the issue of payday loans to the military.