Caving to pressure from the banking lobby, House Republicans are pushing legislation that blocks protection from predatory lenders who target American soldiers.
GOP lawmakers tucked the deregulation item into the National Defense Authorization Act — a major bill setting the military’s funding, along with a number of other controversial terms on Guantanamo Bay and other issues. If the banking item is enacted, it would impose a one-year delay on new Department of Defense rules meant to shield military families from abusive terms on payday loans and other forms of high-interest credit. The bill is being considered Wednesday before the House Armed Services Committee.
The military has been struggling with the financial impact of predatory lending on service members for years. A 2014 report issued by the Consumer Financial Protection Bureau documents a host of abuses targeting troops. One family that took out a $2,600 loan ended up paying back $3,966.84 over the course of a year. Another borrower spent $1,428.28 to pay off a $485 loan in just six months. Thousands of service members receive short-term, high-interest loans each year.
“It is unconscionable,” Public Citizen President Robert Weissman said in a written statement. “It is a sign of just how indebted certain members of Congress are to corporate interests that a critical, commonsense regulation that is needed to protect our national security can be sacrificed in service to the predatory lending industry.”