The Military Lending Act was created in 2006 in order to protect military members from predatory lenders. Now, the Defense Department will extend some of those measures to further protect the military. This type of lending is a big problem amongst military personnel, and it’s something that the Obama administration is seeking to change quickly.
Prior Measures Taken
In 2006, the Military Lending Act capped lending rates at 36% in addition to adding other protective measures to payday loans (the type of loan most often sought by military members). The new measures that will be put in place this October include car loans, credit card loans, and installment loans in addition to payday loans. These changes are important since many military members are often taken advantage of when it comes to loans of most types.
Often, predatory lenders will find a way to circumvent the Military Lending Act rules by imposing additional fees and add-on products that military members are not aware of or do not understand. The new laws would eliminate these fees making any hidden fees or add-ons illegal.
Why It’s an Issue
Why do so many military members fall prey to predatory lenders? Mostly because these patriots sign up for the military at a young age without any experience understanding or dealing with debt of any kind. A payday loan office can look very appealing to someone that is unaware of the fees that go along with this kind of loan (which is precisely why payday loan offices can be found within walking distance of most military bases).
Being bogged down with debt and miscellaneous credit card and other loan charges adds undue pressure to military members and their families. The new measures will prevent predatory lenders from the ability to prey on military personnel, which is a positive thing. Unfortunately, many military members have already fallen prey to debt traps, and a number of these people return home from active duty to mounting bills and debts that are impossible to repay.
The Military Lending Act helps with some of these issues, but until the new measures are implemented there are many military members still struggling with debt. Often, bankruptcy is one of the best ways out of this type of debt, but that comes with some limitations as well.
Getting Out of Debt
There are some special allowances that can be taken advantage of if you are an active part of the military currently. If you do have a massive amount of debt that seems impossible to tackle, you can contact our law offices today for a free case evaluation. You’ve served your country selflessly, let us help you get out of debt quickly. You can reach us at (800) 391-4337 or schedule online.