Activist groups supporting the ban have not addressed the legal consequences, not to mention the moral conundrum, of how a business can refuse to loan money to a person because they wear the uniform of the United States armed forces.

The federal Military Lending Act will take effect Monday, October 1, officially denying military men and women the right to choose where, and in what form, they purchase financial services.

The new law caps interest at 36 percent for certain financial services including payday and auto title loans, effectively banning the product. The new rules apply to only loans of 91 days or less.

Lawmakers passed the Military Lending Act under pressure from consumer groups claiming that payday lending undermines military readiness. The root cause of debt among members of the active duty military, low pay, was not addressed.

Congress passed the Act last year and charged the Pentagon with writing the regulations. After recognizing that the new rules would have severe unintended consequences, the pentagon narrowed the types of financial services that would be capped. Credit cards and bank overdraft fees were exempted.

The left wing groups who lobbied relentlessly for the Act, primarily the National Consumer Law Center and the Center for Responsible Lending, have failed to provide any viable alternative to the short term lending products effectively banned by the Act. Neither have they addressed the legal consequences, not to mention the moral conundrum, of how a business can refuse to loan money to a person because they wear the uniform of the United States armed forces. These groups have instead made clear their intention of using the Pentagon's rules as an example. "The interest rate cap is a good model for states," said Kathleen Keest, senior policy counsel for the Center for Responsible Lending.