Research - Rehabilitation - Re-Employment

Sgt. Shaft 10/17/2005

Dear Sgt. Shaft: Military bases across the nation have become magnets for predatory lenders that prey on U.S. troops. These predatory loan companies sometimes bill their products as "cash advances" or "deferred deposit check" loans, but all offer high-interest, short-term loans that often plunge military personnel deep into debt.

Concerns voiced by senior enlisted leaders and reports that some lending agencies target military personnel with promises of quick and easy loans, and charge annual interest rates as high as 390 percent, have prompted action by FRA, The Military Coalition and members of Congress. Rep. Sam Graves (Mo.) introduced the Servicemembers Anti-Predatory Lending Protection Act (H.R. 97), a measure that would limit interest rates to 36 percent for consumer credit extended to a service member and their dependents. If passed, the measure would authorize a fine or up to one year imprisonment (or both) for lenders who violate the interest cap. Additionally, FRA strongly supports an amendment to the Senate Defense Authorization bill (S. 1042), sponsored by Senator Elizabeth Dole (N.C.), would also limit interest rates to 36 percent on loans offered to military personnel.

Predatory lenders and check cashing centers circumvent current usury laws by labeling their fees as "service charges." The loans are often rolled over, adding additional interest and debt each time the payment period is extended. Military members can lose security clearances, face courts-martial, and even find themselves discharged from the service for delinquent debts. Rather than seeking a quick stop-gap loan with exorbitant interest rates, servicemembers are encouraged to visit a local bank or credit union where loans are often available at more reasonable rates. Military relief agencies, such as the Navy-Marine Corps Relief Society, also offer emergency relief loans for service personnel.

Nearly 15,000 of these so-called "payday lenders" distributed more than $20 million in loans nationwide last year, but many states have been lax in prosecuting such businesses even though the industry is illegal in many jurisdictions. Lending companies have responded to cease-and-desist orders by changing their names and addresses and continuing to do business.

FRA encourages your readers to support legislation to halt the actions of these predatory lenders. Action Alerts specific to predatory lending under the Action Center heading on the FRA website (www.fra.org) allow readers to send a letter directly to their senator or representative in congress, urging them to support legislation that would end these practices. Sincerely, Joseph L. Barnes National Executive Secretary

FRA

Dear Joe,
Congress should not allow active duty military and their families to be preyed upon by these pay day loan sharks. These military men and their families are subject to many hardships for their great sacrifices on behalf of our nation and they should not be hounded by these lender leeches.

Shaft Notes
Congratulations to the DuPont Corporation for their patriotic corporate citizenship actions. Mr. Gene Hebert, State Chair of the Delaware Employer Support of the Guard and Reserve Committee, an agency of the Department of Defense, announced that Mr. Willie C. Martin, U.S. Region President for DuPont, recently signed a "5-Star" Statement of Support for the National Guard and Reserve. The signing ceremony was held at the Dover International Speedway in Dover, Delaware and coincided with NASCAR's "Welcome Home Soldiers" activities, sponsored by DuPont.

The "5-Star" Statement of Support confirms that DuPont:

· Signed a Statement of Support publicly demonstrating its support for its employees who serve in the National Guard and Reserve.

· Reviewed its Human Resources policies to ensure compliance with the Uniformed Services Employment and Re-Employment Rights Act (USERRA).

· Promotes training for managers and supervisors to effectively manage its employees who serve in the Guard and Reserve.

· Adopted polices and programs that are "Above and Beyond" what is required by the USERRA Law. · Is an advocate for employee service in the National Guard and Reserve and will help to promote the mission of ESGR.

"Today, supportive employers are critical to maintaining the strength and readiness of the nation's National Guard and Reserve units. I am asking all Delaware employers to review and amend their current human resources policies to ensure compliance with the Uniformed Services Employment and Re-Employment Rights Act Law (USERRA)," said Hebert. "Many Delaware employers provide 'Above and Beyond' support with pay differential to offset the loss of wages, and extension of health care benefits, which complement coverage provided by the military, when their employees are mobilized."

Employer Support of the Guard and Reserve (ESGR) is a Department of Defense agency established in 1972. The mission of ESGR is to gain and maintain active support from all public and private employers for the men and women of the National Guard and Reserve. ESGR volunteers provide free education, consultation, and if necessary mediation for employers of Guard and Reserve employees.

As the 1.2 million members of the National Guard and Reserve continue to perform an increasing number of unique missions that require extraordinary actions on the part of everyday citizens, ESGR will continue to be the informational agency for the employers of America's new Minutemen. More information about ESGR Employer Outreach Programs and volunteer opportunities is available at www.esgr.mil, or by calling Soren Thomassen, Program Support Specialist of the Delaware ESGR Committee, at 302-326-7582.

Send letters to Sgt. Shaft, c/o John Fales, P.O. Box 65900, Washington, D.C. 20035-5900; fax to 301-622-3330; call 202-257-5446 or email sgtshaft@bavf.org.

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