Should we Cap a Military Loan?

It is no secret that people in the military are often young, and they also often need money. While many people are proud to serve in the military, there is no secret to the fact that the pay for servicemen (and women) is not very good. So, many of them search out the ways and means of improving their finances.

For some, that can mean getting a part-time job during their off-duty hours; while others look to getting a loan to help make ends meet. But, the problem they face is that many people who are desperate for money often fall victim to predatory lenders. It was because of that the military cap loans at an interest rate of thirty-six percent.

It is a sad fact of life that banks and lenders are less than willing to lend money to people who really need it. And, when you do find a bank willing to give you a loan, if your credit is bad and you have few assets, you are going to pay a high interest rate. In the case of military personnel, they have what every lender loves: a steady income. Plus, with so many soldiers, sailors etc.

Being young and inexperienced at dealing with finances, they are easy prey to unscrupulous

So it was that the Pentagon issued a report in 2007 recommending that the federal government do something to control the interest rates lenders charge military families. Both the House and Senate passed bills designed to cap military loans at the recommended interest rate.

The Congress can see that there are a lot of lenders who are merely trying to make a quick buck but siphoning money away from our most loyal and devoted servicemen and women. Yet, as with everything in government, even efforts to cap military loans have met with difficulty.

As both the House and Senate have passed different bills, their differences have to be worked out in committee; which means more delays before anything is sent to President Bush’s desk for signature. Some members of Congress have argued that the military loan cap should be dropped from the defense bill the House passed because anything to do with the interest charged on loans should fall under consumer protection rules.

So, while the politicians argue and debate, and the lobbyists for the lending companies push for the bill to be quietly “killed” in committee, the brave men and woman who serve our nation are left defenseless in their own way. Such a typical situation, isn’t it? These are the same “geniuses” who let the whole subprime market explode in our faces.

Now, when they have the chance to do something meaningful, and something to help those who truly need it; what will they do? Trying to cap military loans is not that difficult a proposition; all we need is the political will to do it.