No More Payday Loans for the Military

People in military uniforms who take out payday loans are finding that their source of quick cash is drying up. Payday lenders are expected to stop making loans to military personnel late next year after Congress adopted a new cap on interest rates the lenders can charge.

Borrowers typically write a check dated on a future payday up to two weeks in advance that also includes interest and fees at rates as high as 520 percent in Colorado.

An industry trade group says just 1.3 percent of payday-loan customers are military. The nation's largest payday lender, Advance America Cash Advance Centers Inc., which operates eight outlets in El Paso County, said that beginning Sunday it will stop making loans to military personnel nationwide. Such lenders are common near military bases, according to a study last year by researchers from the University of Florida Law School and California State University-Northridge.

Service members can lose security clearance or face disciplinary action including court martial for failing to repay debts, including payday loans. It makes it difficult or next to impossible to get out of debt," said Patricia Randle, financial readiness program manager for Army Community Service at Fort Carson.

Read more about this news story here: Gazette.com