defining problem loans, the NCLC claims, the Pentagon's final
rules weaken a federal law enacted to protect military families
from abusive financial practices.
Lauren Saunders, managing attorney for the National Consumer Law
Center (NCLC), claims "lenders could easily tweak their loan
terms to dodge new Pentagon rules." By narrowly defining problem
loans, the NCLC claims, the Pentagon's final rules weaken a
federal law enacted to protect military families from abusive
The NCLC and other liberal groups lobbied hard for the new
rules, primarily to restrict payday lending to military men and
women. This despite the fact that only a tiny fraction of payday
loans in the U.S. are taken out by members of the military.
The Military Lending Act passed by Congress last year caps
annual interest rates at 36 percent for consumer loans to
In lieu of giving banks a blanket exemption, the Pentagon
specifically defined the categories of loans that are subject to
the cap, such as payday loans. Among the exempted loans are
credit cards and overdraft loans.
The always thesaurus-ready Center For Responsible Lending's
Kathleen Keest, senior policy counsel, said in a statement
issued today, "Predatory lenders are like rapidly mutating
viruses. You can't just vaccinate against a very specific strain
and expect the problem to go away." - nice.