thedrifter
07-28-07, 02:25 PM
Corps tests small loans to tide Marines over
Experiment offers up to $500 to help leathernecks avoid payday lenders
By Kimberly Johnson - Staff writer
Posted : Saturday Jul 28, 2007 8:18:53 EDT
The Corps is offering its own zero-interest $500 loans to help leathernecks bridge unexpected financial gaps between paychecks.
It’s part of the Corps’ fight against “predatory” payday lending outfits that set up shop near military bases, the Corps’ top officer said.
“We have some very predatory lending policies that take place outside most of our gates that offer you as much money as you need to get you through to the next payday at a return rate of about 4,000 percent,” Commandant Gen. James Conway quipped at a July 11 town hall meeting with Marines and their spouses at Marine Corps Air Station Yuma, Ariz.
The Navy-Marine Corps Relief Society, a private, nonprofit charity, has launched a small-scale test program at the Yuma base that issues small loans to Marines in need, Conway said.
“All you need to do is show an ID card and a unit, and they’ll pass you about $500 with a zero-interest loan to help you stretch when you’ve got unexpected costs,” he said. “You won’t have to worry about going in to see some of these [payday lending] folks, and we think that’s a very positive thing.”
The program is an experiment, but Conway said he was optimistic about its future.
“I think it’s working very well based on reports back in Washington,” he said.
Congress passed a law last year that protected troops from payday lenders, capping interest rates at 36 percent. However, in the Pentagon’s draft rules for implementing the law put out in May, officials limited what types of loans were covered under the cap. Military family groups and other consumer advocates criticized defense officials for excluding other types of loans, such as military installment loans, that the Defense Department itself has called predatory in the past.
Also at the meeting, Conway said Marine families are now able to see more financial relief with an update to the Corps’ moving policy that pays full replacement value on personal goods that are lost or damaged during transition to a new base.
“That has not always been the case,” he said. “There’s a time when we’ve lost some stuff and we had to figure out what did it cost when we bought it, what’s been the deterioration, what’s the expected value now. No more. Now if you lose something, you’re going to get full replacement cost against purchasing that item today.”
Cost-cutting measures on the military side of the fence emerged during the open forum, as questions were asked about the rationale behind cutting video conferencing capabilities with Marines deployed in Iraq, a tool families had grown accustomed to using.
“There was sort of an arbitrary decision made in Washington by some people on the [Office of the Secretary of Defense] staff that they were going to do away with that bandwidth,” Conway said.
“The services weren’t consulted,” he said. “We have since said time out. We realize that we’ve got to pay a little more or make adjustments or whatever, but that’s a pretty valuable source of relief for our families.”
The decision to curb Internet bandwidth for deployed troops was made before potential impacts were discussed, he said.
“I don’t know how it’s going to turn out, but I do know that all the services are feeling pretty much the same way, certainly the Army and the Marine Corps because we’re most affected,” Conway said.
Ellie
Experiment offers up to $500 to help leathernecks avoid payday lenders
By Kimberly Johnson - Staff writer
Posted : Saturday Jul 28, 2007 8:18:53 EDT
The Corps is offering its own zero-interest $500 loans to help leathernecks bridge unexpected financial gaps between paychecks.
It’s part of the Corps’ fight against “predatory” payday lending outfits that set up shop near military bases, the Corps’ top officer said.
“We have some very predatory lending policies that take place outside most of our gates that offer you as much money as you need to get you through to the next payday at a return rate of about 4,000 percent,” Commandant Gen. James Conway quipped at a July 11 town hall meeting with Marines and their spouses at Marine Corps Air Station Yuma, Ariz.
The Navy-Marine Corps Relief Society, a private, nonprofit charity, has launched a small-scale test program at the Yuma base that issues small loans to Marines in need, Conway said.
“All you need to do is show an ID card and a unit, and they’ll pass you about $500 with a zero-interest loan to help you stretch when you’ve got unexpected costs,” he said. “You won’t have to worry about going in to see some of these [payday lending] folks, and we think that’s a very positive thing.”
The program is an experiment, but Conway said he was optimistic about its future.
“I think it’s working very well based on reports back in Washington,” he said.
Congress passed a law last year that protected troops from payday lenders, capping interest rates at 36 percent. However, in the Pentagon’s draft rules for implementing the law put out in May, officials limited what types of loans were covered under the cap. Military family groups and other consumer advocates criticized defense officials for excluding other types of loans, such as military installment loans, that the Defense Department itself has called predatory in the past.
Also at the meeting, Conway said Marine families are now able to see more financial relief with an update to the Corps’ moving policy that pays full replacement value on personal goods that are lost or damaged during transition to a new base.
“That has not always been the case,” he said. “There’s a time when we’ve lost some stuff and we had to figure out what did it cost when we bought it, what’s been the deterioration, what’s the expected value now. No more. Now if you lose something, you’re going to get full replacement cost against purchasing that item today.”
Cost-cutting measures on the military side of the fence emerged during the open forum, as questions were asked about the rationale behind cutting video conferencing capabilities with Marines deployed in Iraq, a tool families had grown accustomed to using.
“There was sort of an arbitrary decision made in Washington by some people on the [Office of the Secretary of Defense] staff that they were going to do away with that bandwidth,” Conway said.
“The services weren’t consulted,” he said. “We have since said time out. We realize that we’ve got to pay a little more or make adjustments or whatever, but that’s a pretty valuable source of relief for our families.”
The decision to curb Internet bandwidth for deployed troops was made before potential impacts were discussed, he said.
“I don’t know how it’s going to turn out, but I do know that all the services are feeling pretty much the same way, certainly the Army and the Marine Corps because we’re most affected,” Conway said.
Ellie