T wo Democratic congressmen are sponsoring a bill that could further stiffen limits on payday loans that target military users or their own families, especially when it comes down to federal retirement benefits.
The Annuity protection and Security Under Reasonable Enforcement (ASSURE) Act, introduced by Reps. Matt Cartwright of Pennsylvania and Gerry Connolly of Virginia, and co-sponsored by two dozen lawmakers, would additionally protect various other kinds of federal employees.
“this is certainly exploitation, pure and easy,” Connolly told the Washington Examiner. “we are speaing frankly about the targeting of army families, sometimes with one partner presently serving in Iraq and Afghanistan.”
Pay day loans, also called a “cash advance” or “check always loans,” is “a loan that is short-term generally speaking for $500 or less, this is certainly typically due on your own next payday,” in line with the customer Financial Protection Bureau.
This year, interest rates for military loans are capped at a 36 percent of the military annual percentage rate under the Military Lending Act, passed in 2006 and expanded in scope. The ASSURE Act would get further, capping prices at “six points above prime,” Connolly said.
The Examiner reported in December 2014 on types of payday financing to army solution people that reached rates up to 300 %.
” the existing guidelines beneath the Military Lending Act are comparable to delivering a soldier into fight with a flak coat but no helmet. The rules need to be expanded,” Consumer Financial Protection Bureau Director Richard Cordray said in December to give our troops full-cover protection.
“Federal workers, military profession servicemen and females, and postal employees invest a very long time making a federal annuity,” Cartwright said in a statement. “Unfortunately, retirement advance organizations usually prey upon federal retirees and veterans.”