There’s an article in today’s USA Today about payday lenders and the positively ruinous interest charges they inflict on the needy, which all too sadly include a lot of the lower-ranked military.
As many as one in five members of the armed services are being preyed on by loan centers set up near military bases that can charge cash-strapped military families interest of 400% or more, a new Pentagon report has found.
If you want to read the Pentagon’s full (92 page) report, you can find it on this page. WARNING: .pdf document.
This story reminds me of two fellows I used to know. Ant’ny and Nunzio made short-term loans for several years until a prosecutor took offense and did something about their futures.
When I read the story the first thought I had was that Tom Delay was in the wrong business when he was shaking down Indian tribes to get competitors shut down, and sweatshops in the Marianas to run back room whorehouses. Why, 400% is more than licensed banks charge – although not a lot more than their South Dakota credit card mills extract.
Steep lending charges have long plagued servicemembers, but the problem has become a more urgent concern to the military as it has struggled to fill its ranks during the Iraq war. That's because debt troubles can keep troops from going overseas."We're seeing a growing trend of folks who are not eligible to deploy because of financial problems," says Capt. Mark Patton, commander of Naval Base Point Loma in California. Patton says debt problems can cost some servicemembers their security clearances.
Well, hell,we can’t have people escaping their responsibilities to conduct Mr Bu$h and Mr Cheney’s illegal wars of aggression and ethnic-cleansing occupations by running into debt. Can’t these married E-3s and E-4s and E-5s put their wives and children out to work in order to buy food? Let’s face it, we can’t be giving them pay raises while Paris Hilton and George Bu$h are faced with ruinous estate taxes when their parents die.
Lenders typically charge $15 to $25 per $100 loan for two weeks, and most loans are extended for several weeks. The report says the average loan is $350 and has an annual interest rate of 390% to 780%. The average borrower, it says, pays back $834 for a $339 loan.The report cites estimates 13% to 19% of servicemembers — at least 175,000 people — took out high-interest, short-term loans last year. It said nine out of 10 loans go to borrowers who take out five or more over a year.
Congress ordered the Pentagon to conduct the lending study. This year, the Senate passed an amendment to its annual defense spending bill that calls for a 36% cap on interest for loans to servicemembers. It would not affect loans to civilians.
The House version of the defense bill doesn't include the amendment. A joint committee will begin working out differences between the two versions next month.
I suppose it isn’t surprising that the House didn’t include the amendment, since those boys and girls are even less interested in serving the average American citizen than the US Senate is. I believe the Senate contains 100 multi-millionaires, whereas in the House they’re still struggling to break the $800,000 mark. I’m not sure the defense bill will incorporate any changes in allowable interest rates when it reports out of conference committee; lenders’ interest rates are generally controlled by state legislators.
On the USAToday’s forum page there are some comments to this story. It appears that users of this service mostly defend it, and employees of payday lenders think it’s the greatest thing since sliced white bread. (What a surprise!) They also offer the “Darwin” defense. (Borrowers need to learn how to manage their finances, stand on their own two feet, and don’t borrow more than you need.) I guess most payday lending shops are owned by Fascist Party members.
I suppose if we weren’t protecting millionaires with tax cuts we might be able to pay our lower ranking soldiers enough to constitute a living wage, they’d be able to bank some money in savings accounts and then they wouldn’t need to borrow from these vultures.
A top of the waaay too small Kevlar helmet to Gordo, who knows I grew up with Ant'ny and Nunzio.
Comments
Ant'ny and Nunzio must be gettin' out soon, huh? I hope their clients' interest hasn't been accruing all these years. :)
I heard they learned a whole new trade - making furniture.
Hello Lurch and all,
Here's some pivotal knowledge (wisdom) so you and others can stop focusing on symptoms and obfuscatory details and home in like a laser on the root causes of and solutions to humanity's seemingly never-ending struggles.
Money is the lifeblood of the powerful and the chains and key to human enslavement
There is a radical and highly effective solution to all of our economic problems that will dramatically simplify, streamline, and revitalize human civilization. It will eliminate all poverty, debts, and the vast majority of crime, material inequality, deception, and injustice. It will also eliminate the underlying causes of most conflicts, while preventing evil scoundrels and their cabals from deceiving, deluding, and bedeviling humanity, ever again. It will likewise eliminate the primary barriers to solving global warming, pollution, and the many evils that result from corporate greed and their control of natural and societal resources. That solution is to simply eliminate money from the human equation, thereby replacing the current system of greed, exploitation, and institutionalized coercion with freewill cooperation, just laws based on verifiable wisdom, and societal goals targeted at benefiting all, not just a self-chosen and abominably greedy few.
We can now thank millennia of political, monetary, and religious leaders for proving, beyond any shadow of a doubt, that top-down, hierarchical governance is absolute folly and foolishness. Even representative democracy, that great promise of the past, was easily and readily subverted to enslave us all, thanks to money and those that secretly control and deceptively manipulate all currencies and economies. Is there any doubt anymore that entrusting politics and money to solve humanity's problems is delusion of the highest order? Is there any doubt that permitting political and corporate leaders to control the lives of billions has resulted in great evil?
Here's a real hot potato! Eat it up, digest it, and then feed it's bones to the hungry...
Most people have no idea that the common-denominator math of all the world's currencies forms an endless loop that generates debt faster than we can ever generate the value to pay for it. This obscured and purposeful math-logic trap at the center of all banking, currencies, and economies is the root cause of poverty. Those who rule this world through fear and deception strive constantly to hide this fact, while pretending to seek solutions to poverty and human struggle. Any who would scoff at this analysis have simply failed to do the math, even though it is based on a simple common-denominator ratio.
Read more here...
Thanks for this. I’m not as convinced as you are that Perkins brings any blinding light of revelation (or relevance) to a cosmopolitan view of the world’s economy or its money system (the two are not completely interdependent, as I‘m sure you know.)
Let’s start with the provenance: a wise man does not admit publicly that he auditioned for employment at NSA. By telling the world that you were interviewed you announce that you have a distinct interest in areas that are anathema to international bankers, who are the heartblood of the world’s money system. Further, I expect it’s unwise to be on the job market and ever admit you failed an interview.
No. Don’t go there. It’s pointless to claim he was merely curious, and wanted to see what it was all about. If you interview with any government agency with a veil of covert action you know what it’s all about and if they agree to interview they expect you to keep your mouth shut about it. The fact that he allegedly interviewed and failed the interview is a strong indicator that they found something amiss either with his personal history, his knowledge or his attitudes.
I’m also a bit leery of his “moment on the road to Damascus.” While generalizations are always suspect, in my limited experience a single seminal event usually does not change a person’s worldview, unless it is an especially grueling emotional moment. Since Perkins doesn’t allege coming home one night and finding his wife, children and dog all dead by means of horrible torture, I doubt he had an epiphany.
Further, quite a few reputable experts and commenters on the economic scene have noted how sparse his book is in the area of – what is that word? - proof for his conspiracy theories. Having said that, it is true that the World Bank and IMF do engage in exploitative financing of Third World emerging nations, leveraging their mineral assets for quick transitory cash. (That’s a form of exploitative usury, which fits in well with the general theme of this thread.)
But I do wish you success with your blog. Thank you for visiting us.
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