California Advocates Suggest California Members of Congress and California State Legislature Could Honor Veterans By Strengthening Protections Against Predatory Payday Loans
The California Reinvestment Coalition and the Center for Responsible Lending issued a call today, urging state and federal lawmakers to consider strengthening protections for veterans and their families. Earlier this year, the Department of Defense released proposed rules to update enforcement of the Military Lending Act, which was passed in 2007. An update is necessary because of shady lenders exploiting loopholes in the 2007 law. With more than 1.8 million veterans, California is home to the nation’s largest number of veterans. California also has the nation’s largest active duty military population—over 160,000 service members.
The vicious cycle of debt is not a side effect of payday lending it is the business model. A Center for Responsible Lending analysis shows that California payday lenders, who advertise their products as a one-time quick fix for consumers facing a cash crunch, generate 76% of their revenue from borrowers who take out 7 or more loans per year. A map of California payday lending locations shows the lenders cluster in low-income communities.
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