By According to Stars and Stripes loan sharks working out of pay day loan offices have been targeting the US military.
Law assistant professor Chris Peterson and geography assistant professor Stephen Graves examined the locations of thousands of payday lenders in 20 states, and found they tended to congregate in counties and zip codes near military facilities.
“All other things being equal, you’re less likely to find a bank and more likely to find an instant lender near one of these bases,†Peterson said. “We’re seeing many more payday lenders than we would have accounted for.â€
For example, Alabama has 24 instant loan companies per 100,000 residents, one of the highest rates in the country. But in Houston County, where Fort Rucker is located, that ratio is even higher: 41.67 firms per 100,000 residents. The county has 37 payday lenders but only 35 banks.
Outside of Fort Bragg in North Carolina, 18 payday lenders have set up shop within three miles of the front gate. Fort Hood in Texas has 13 instant lenders within one mile of the base perimeter.
Foot Hood only has 13? When I was at Ft. Hood there seemed to be a lot more than that. These pay day loan operations target the US military because they know they will get their money. Soldiers can face military legal action for not paying their bills. So these pay day loan shops give out loans and charge 30% interest and get soldiers into massive debt.
When I was stationed state side I knew an NCO who could not control his wife’s spending habits. She would keep buying computers, TV’s, DVD players, etc. which they could not afford. She kept taking out loans from the loan sharks and when those loan sharks would contact the command she would then get a loan from another pay day loan place to pay off the prior debt or use new credit cards to pay them off. In total this family was $50,000 in debt to loan sharks and $35,000 in debt with the credit cards plus they had 5 kids. He ended up getting chaptered out of the Army because of his money problems.
Many of these loan sharks are retired military and know that the Army can chapter soldiers out for not paying them off so they make it as easy as possible for soldiers to get a loan and then kill them with the interest fees.
Fortunately here in Korea we do not have to worry about soldiers running to a pay day loan place and getting in massive debt because they run themselves into enough debt with just credit cards. The loan sharks probably cannot setup business here due to issues with running such a business in a foreign country. Hopefully it stays that way.
7:19 am on January 6th, 2007 1
The New York Times ran an article about this a few weeks ago. They also did another article about benefits active-duty service members are entitled to under the "Servicemembers Civil Relief Act." One large benefit is that loans taken up before entering the service are capped at 6% annual interest. However, there is no cap for interest rates on loans after you join the military. The article is also posted here:
Some Creditors Make Illegal Demands on Active-Duty Soldiers http://www.truthout.org/docs_2005/032805F.shtml
7:34 am on January 6th, 2007 2
Yeah…those loan places are about the only way I know I'm near a military base, or in the ghetto.