< HOME  Friday, September 01, 2006

moneylenders take the military to the cleaners

Not only do they finance wars by fronting capital needed to build bombs and other assorted weapons of mass destruction, they lend money to every cash-strapped Pvt. Tom, Dick, and Harry in the military, charging exorbitant amounts of interest as they go.
[Why is the Pentagon] adamant about getting Congress and the states to crack down on payday lenders, title lenders, rent-to-own companies and other similar predators?

Because those lenders are ruthless in targeting consumers, military or civilian. Their goal isn’t just to make a loan, but to trap borrowers in a cycle of debt. They make their money by duping people into coming back over and over.

And they’ll do what it takes to get borrowers into their offices. “Predatory lenders market to the military through their ubiquitous presence around military installations and/or through the use of terms to affiliate themselves with the military,” a recent Pentagon report said. It said that borrowers might “believe that these loan products are sanctioned or approved by the military, due to extensive affinity marketing tactics.”

The report concluded that Congress and the states must rein in these small, short-term lenders by passing strict regulations, including a 36 percent cap on annual interest rates for loans made to service members and their families. Congress is considering a bill that would do that. But it and the states, particularly South Carolina, should protect all borrowers from these predators.
36%!!! That's a lot of interest! That's like getting only 64 cents out of every dollar you borrow. And if you don't make your payments on time that could quickly double and triple, so that you no longer derive ANY value whatsoever from the loan. On the contrary, you're being bled dry.
The Department of Defense report says predatory lending destroys morale, threatens military readiness and destroys families — and careers. For example, it cites a study by the Navy's Central Adjudication Facility that shows the number of security clearances it revoked or denied for financial reasons leapt from 212 in fiscal year 2002 to 1,999 in fiscal 2005. In 2005, financial problems accounted for 80 percent of all revocations and denials.
So essentially, the butchers who send our young men and women to get killed like cattle, are complaining that predatory lenders bleed too many of them dry before they ever get to the battlefield. How ironic.
The military collected anonymous case studies from installations in its attempt to track the impact of predatory loans . . . Here are a few:
  • An Air Force E-4, assigned to Maxwell Air Force Base in Alabama, was behind on her car and rent payments and needed cash quickly. She had bad credit and thought a payday loan was the way to go. She got a $500 loan with an agreement to pay back $600 in two weeks. [if I calculate right, that's 480% APR] When she couldn’t pay, she took out other payday loans and was forced to do multiple rollovers on each one. To pay off the loans she obtained a $10,000 installment loan that carried a 50 percent APR. The total cost to pay off the payday loans was $12,750, and her total obligation to the installment loan company was $15,000. Her financial problems were a contributing factor to her pending divorce.

So, she started out owing $500 and ended up owing $15,000. Nice.

  • An Air Force E-4, assigned to Scott Air Force Base in Illinois, had payday loans over seven months with two lenders, totaling $900 owed in principal, with $200 in fees each month to roll over the loans. By the time she went to financial counseling, she had spent $1,875 carrying the loans. She also had a military installment loan for $7,000 and an additional loan for $13,000. The interest rate on the installment loan was 61 percent, and the loan agency would not allow her to extend her repayments.

Notice how they pick on women - no doubt, single mothers working hard to feed their children.

  • An Air Force E-4 assigned to Robins Air Force Base in Georgia borrowed $400 from a payday lender. She couldn’t repay it, so she went to a second payday lender to pay off the first loan. This process repeated itself five times until she was paying $1,200 per month to maintain the loans. By the time she got help, she had paid $3,000 on the $400 loan. She eventually declared bankruptcy.

Which will solve her problems temporarily, until they put her on every black list in town.

  • A Marine E-2 assigned to Camp Pendleton in California and his wife accrued 10 payday loans with the principal totaling $2,390. The monthly finance charge was $422. He got a no-interest loan from a military relief program to repay the debt.

ALL loans should be NO INTEREST. And people should borrow money only when they NEED it - not to consume garbage.

  • An Army E-7 assigned to Fort Jackson had two payday loans ($1,862), a car loan ($37,550) and two military installment loans ($15,400). The debt from his car payment, installment loans and payday loans were too much for his budget. Prior to paying off the loans, he was harassed and threatened by collectors, closed his bank account and was sued. The unit intervened in collecting on his debts.

$37,500 for a car loan??? What kind of cars are they marketing to these personnel?

  • An Army E-6 at Fort Jackson had three installment loans equaling $2,660. He owed $1,000 to a rent-to-own company. He was threatened that his wages would be garnished. He closed his bank account, and his unit got involved in the collection action and disciplined him.
Most of the cases involved junior enlisted personnel; 80 percent of the Army cases involved grades E-1 through E-4. Unfortunately, many had already been sucked in by unscrupulous lenders by the time they sought help. Many had received harassing phone calls, threats that their commander would be contacted or assertions that their pay would be garnished. Some were disciplined as a result of their attempt to solve financial problems through predatory loans. Disciplinary action ranged from letters of reprimand and non-judicial punishment to loss of promotions and separation from the military.

We can’t have a ready military if we allow this to continue. Frankly, these legalized loan sharks are wreaking similar havoc among civilians.

They aren’t the kind of people I’d do business with. Lawmakers should revoke their free pass to have their way with our citizens.
Simply appalling.

They have their way with Americans.

They have their way with the world.

They may own the banks, but they take us all to the cleaners.


At Friday, September 01, 2006, Blogger drac said...

Well I finally signed up for an account so I could post comments and such.

Glad to see we're back on to topics of finance and all.

The Israeli mess was important to cover but I think it strayed away from what I perceived to be the goals of the blog.

Good post qrs. Take it easy if you can.

At Friday, September 01, 2006, Blogger qrswave said...

hey drac, Good to see you again!

Sorry for the inconvenience. But, I was getting too many anonymous trolls. I don't censor any comments, you know, and it got to be very disruptive. They seem more willing to be abusive anonymously than if they have an identity.

RE: Israel - it is hard not to cover it. And I'm afraid it's not over yet. The most outrageous part about it, aside from all the innocent people they're killing, is that they're financed by our tax dollars.

It's good to see you back.

At Friday, September 01, 2006, Blogger superslave2 said...

great post...truly tragic content...

to me, the banking/finance issue is still an "isreali" issue...like most war, much crime and plenty of corruption issues

i.e. "....it's the Jews , stupid"

At Friday, September 01, 2006, Blogger drac said...

Oh I know its important and certainly not over yet. They seem to be charging on ahead like the crazy bastards they are.

I just would have liked more investigating into who exactly had been voting to give them money, bombs, etc.

I understand making us register to post. The comments would tend to get pretty aburd with the anonymous posters.

At Friday, September 01, 2006, Blogger Gamble Online said...

They go after military because they HAVE to pay it back. If they don't, the lender simply calls their superior officer. This is a no-lose senario for the lender-that is why it is SOOOO important to keep a TIGHT leash on this SCUM. ABOLISH THE FAGGOT RESERVE.

At Friday, September 01, 2006, Blogger gnostalgia said...

I happen to appreciate the coverage of the Israeli situation as well as the posts about money. I don't think it's possible at this point to separate these issues. They are tied together.

At Saturday, September 02, 2006, Blogger Michael Price said...

One of the two reasons the Zionists killed John F Kennedy, is he was a threat to their power because he planned to reform the Federal Reserve (the other reason is that he refused to support Israel's plan to acquire nuclear weapons).
Kennedy was designated 'Amalek' by the Talmudic Jews. That meant not only he, but his 'seed' was to be destroyed - his son's death was no accident.

At Sunday, September 03, 2006, Blogger lesliemai said...

those that reap profit and earn living from riba risk being tossed to the hell fire, they cause so much damage to the earth, far from treading lightly. those that reap profit from riba that in turn causes death and destruction, surely must be ignorant of what ther future holds in store for them, for if they knew they would stop immediatly.

At Sunday, September 03, 2006, Blogger Citisucks said...

Great post! The corporate terrorist banking terrorists often don't even follow or have the laws on the books enforced on them when it comes to the military. In fact Citibank (group) and Wells Fargo were among lenders deliberatly ignoring the law in order to take advance of soliders who were away. Of coure the corporate terrorists in power do nothing about this. I did a 3 part series about this. See...
Citisucks: Like Bush, Citibank hates the troops Part I
Citisucks: Like Bush Citibank Hates the Troops: Part II
Citisucks: Part III: Like Bush, Citibank hates the troops

At Wednesday, August 07, 2013, Blogger Jessie Bromberg said...

I really got a lot of things to know about the moneylenders by reading your post. Even, the things you have mentioned in the post is beyond the thoughts of normal human being.


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