New legislation limits lenders

  • Published
  • By Staff Sgt. Eric J. Bolt
  • 28th Bomb Wing Public Affairs
ELLSWORTH AIR FORCE BASE, S.D. --  Congress has recently passed legislation that will limit the annual percentages on payday and other types of loans offered to military members and their families.

"Predatory lending companies have long offered short-term, high-interest loans (sometimes referred to as pay day loans) to military members and their families. A new law, passed as part of the 2006 Defense Authorization Act, limits the annual percentage rate of such loans to 36 percent," according to a memorandum by Col. Margaret Poore, Air Combat Command director of manpower and personnel. The new legislation went into effect Oct. 1.

The law will affect many types of loans to include payday loans, tax-refund loans and car title loans. "Some lenders may stop offering these types of loans to military members others may look to capitalize on outstanding loans by calling in loans or repossessing vehicles from members who cannot pay the loans off by Oct. 1," according to Col. Poore's memorandum.

"The best thing for a military member to do is come and talk to us," said Beverly Pineiro, Airman and Family Readiness Center community readiness consultant. "Our job is to educate the community and help them to make informed decisions. Everything we do is about education."

Some Airmen at Ellsworth have already been affected by this new law, she said. Lenders have tried to pull the entire outstanding balance out of the member's checking or savings account, leaving the member with significant overdraft fees and penalties.

Airmen are encouraged to contact the A&FRC Center or their first sergeant if an issue may arise with a lender.

"Do not hesitate to give your shirt a call," said Master Sgt. Chris Morgan, 28th Mission Support Squadron first sergeant. "It is better for your shirt to know in advance when there might be a problem opposed to finding out after the problem has escalated into something much larger."

A loan is a product, not a favor. People have to make smart decisions when signing a loan, Ms. Pineiro said. "Comparative shopping can help save people a lot of money and headache. Ensure that all of the fine print is read in detail and all terms of the loan are understood before accepting it."

For more information call the A&FRC at 385-4663 or your first sergeant.