Is the Servicemembers Anti-Predatory Lending Protection Act going to curb military predatory lending?Answer:
The Servicemembers Anti-Predatory Lending Protection Act limits the APR to 36%, demands greater term disclosure and limits automatic roll-overs.
How is military personnel affected by predatory lending?
Financial education for military members has been sought to increase, but given that 40% of servicemembers are below 25 years of age, they are not versed in financial matters and are an easy prey to predatory lenders. Since financial stress limits the ability of servicemembers to perform successfully their duties, the Departmemt of Defense has taken upon itself to help reduce stress based on financial matters among the military through the Servicemembers Anti-Predatory Lending Protection Act.
Lending Regulations to Curb Predatory Lending among the Military
- Lenders cannot change a loan terms unless they result in more favorable terms for the borrower.
- Borrower's right to legal recourse cannot be waived.
- Payment obligation has to be clearly described.
Although the usefulness of the Servicemembers Anti-Predatory Lending Protection Act is undeniable, it is not only servicemembers who need better consumer protection and clearer lending rules. The average consumer could certainly benefit from better financial education and greater predatory lending protection.
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