Protecting Troops from Predatory Lenders

The Defense Department on Tuesday issued the final rule of the Military Lending Act, a move intended to protect service members from predatory lending practices, said President Barack Obama during a speech at the 116th Veterans of Foreign Wars National Convention? in Pittsburgh, Pa. The “final rule” covers all forms of payday loans, vehicle title loans, refund anticipation loans, deposit advanced loans, installment loans, unsecured open-end lines of credit, and credit cards, according to July 21 DOD release. “There’s already a lot to protect our troops and families against unscrupulous predatory lenders, but some of the worst abusers—like payday lenders—are exploiting loopholes to trap our troops in a vicious cycle of crushing debt,” said Obama. The new rule goes into effect on Oct. 1 and will have staggered compliance dates, according to a separate DOD release. The announcement closes out a three-year study conducted by DOD, the Department of Treasury, the Federal Trade Commission, and financial regulators. “This new rule addresses a range of credit products that previously escaped the scope of the regulation, compromising the financial readiness of our troops,” said Deputy Defense Secretary Bob Work. (Obama transcript.)