Diatribune

Did the talk about supporting the troops grab your attention?  Good.  Now I'm going to talk about something that sounds very boring, but is vital to truly supporting the troops.  Usury.  Everyone still here?  Then I'll start out for those of you who are unfamiliar with the topic with an explanation of what usury is and why it is slowly attacking and destroying the morale of the United States Armed Forces.

According to The American Heritage Dictionary, usury is defined as "the practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate."  Needless to say, this sounds like a very bad thing.  And it is.  But how does it affect the military?  Take a trip to your local paycheck loan office and you'll see how.

You've no doubt seen the offices in strip malls and watched the ads on tv.  Get money fast!  Easy money!  Neon signs flashing amongst the video stores, pharmacies, liquor stores, and beer distributors of America claiming that you can get from one paycheck to the next quickly and easily without any long term effects.  It sounds too good to be true, and it almost always is.  The way these paycheck loan offices work is simple.  Just walk in and say how much you're looking to borrow (let's say $300), and hand over a post-dated check for the amount plus the paycheck loan office's fee, typically $15 for every $100 borrowed.  This rather innocuous sounding fee results in APRs that routinely exceed 400%!  Do you know anyone paying 400% on a mortgage?  A car loan?  Even a credit card?  No.  No one pays that much provided the lenders are up front about the fees and the borrowers have any options available to them at all.  Unfortunately, paycheck loan offices know exactly where to go to avoid borrowers with a number of options.  They go to poorer neighborhoods, depressed areas of the country, and perhaps saddest of all, neighborhoods near military bases.

So why military bases?  Because there are often younger families in these areas with a steady paycheck and a checking account available to make collection of these debts easier.  And unlike any other occupation in America, if you're a member of the military, failure to pay back a loan is a violation of the Uniform Code of Military Justice.  And this has been documented by Military Money, a magazine and website designed and created by the Department of Defense to help members of the military better maintain their finances.  And it has been shown time and again that Military Money is right: members of the military and their families are being taken advantage of by the predatory lenders operating these paycheck loan offices and they're doing so at a rate far greater than any other demographic in America.

According to the Center for Responsible Lending, a wide variety of methods have been used to entice members of the military to rely on these offices when trying to make it from week to week.  A study conducted by the Center for Responsible Lending in North Carolina showed that these offices routinely used military terms when naming their business (e.g. Armed Forces Loans and Military Financial, Incorporated), hired former military personnel to entice current military personnel to use the paycheck loan service, and even clustered their offices around military bases at a rate far greater than would be expected given the population level.

So let's put all of this together.  Military personnel, especially new recruits, are paid very little when they first begin their career, on average approximately $1,200 per month.  They often have difficulty meeting all of the expenses of living on their own due to high prices, a high cost of living, and their low salary.  To make ends meet, enlisted men and women go in droves to these paycheck loan offices for a little money to make it to the next week.  And according to Consumers Union, the publisher of Consumer Reports, once you start borrowing, you don't stop, making on average eleven transactions annually, often in the form of rolling over paycheck loans from one pay period to the next.  And this isn't just a problem for the military borrowers.  This is a problem for every man, woman, and child in America.

When these loans are made, they reduce our military's morale and readiness.  As retired Navy Captain Chalker W. Brown said, "The last thing you want is a young sailor programming a Tomahawk missile in the Persian Gulf who is worrying about whether his car is being repossessed back home."  Indeed, the Department of Defense has listed these predatory lenders as one of the top ten issues impacting the quality of life for U.S. soldiers.  Predatory lenders such as these paycheck loan offices are undermining our military morale, and by extension, our national security all to service their unending greed.

Unfortunately, this is not an issue that receives a lot of attention.  The media ignores it.  Members of Congress routinely do nothing to help solve the problem.  And yet, Congress has the power to act.  According to Article I, Section VIII of the United States Constitution, Congress has the power to regulate interstate commerce.  Many of these paycheck loan offices are part of corporations operating nationwide.  Most of the servicemembers using these services routinely cross state lines and travel overseas, all while spending money that has either been provided by one of these predatory lenders or has been claimed by those self same lenders.  And the services and goods purchased by these servicemembers are also part of the interstate stream of commerce.  

So what can we do?  We need to bring this issue to the forefront of the American consciousness.  It needs to be discussed in the halls of power.  It needs to be stopped.  Once upon a time the government made it illegal to charge excessive interest rates.  The time has come once again to make that a reality.  Not only is it the moral thing to do, but it is the right thing to do for our economic strength and our national security.