Banks Fight Cap on Rates, Fees for Military Families

More than any other law in years, this legislation has triggered a near panic for the banking industry operating inside the beltway, and it's up against tough opponents. Senior Defense Department officials have pushed hard for the protections, and consumer groups have already lined up to defend the interest-rate caps and other protections put in place.

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For years, the Defense Department has struggled with ways to shield servicemembers from mounting debt problems. In the last few years, the agency has held seminars for more than 300,000 servicemembers, but this summer senior officials told lawmakers that a new law was necessary to protect the military from predatory lending, and payday and internet loan traps.

Last week, the John Warner National Defense Authorization Act was signed into law by President George W. Bush. The law includes a provision aimed to protect military servicemembers from the high fees charged by payday loan stores and other companies.

For some, this provision was thought to only address specific lenders, such as payday loan companies operating on or near military bases and internet loans where the terms were unclear. But the law actually casts a much wider net.

The provision, sponsored by Sen. James Talent, the Missouri Republican who is in a tough reelection fight, mandates that lenders - including more than 8,000 commercial banks and thrifts - cannot charge more than a 36% annual interest rate to servicemembers or most family members for short-term loans and things such as credit cards.

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The law did something else that riled the banking industry - it gave the Defense Department jurisdiction over the new law, cutting out banking regulators such as the Federal Reserve that traditionally handle such issues. This move has already caught the regulators' attention.

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This summer, Defense Department officials released a report alleging that many lenders stationed around military bases attempted to hook servicemembers into predatory short-term loans with high interest rates that would be difficult if not impossible to repay.

Defaulting on such loans has a devastating impact on servicemembers, including the loss of security clearance. In fact, the Associated Press reported last week that there has been a ninefold increase from 2002 to 2005 in the number of military servicemembers who have lost their security clearance because of debt problems, with security clearance stripped from 2,654 Navy, Marine Corps and Air Force personnel last year. Data from the Army was not available.

Bush Moves Toward Martial Law

Public Law 109-364, or the "John Warner Defense Authorization Act of 2007" (H.R.5122) (2), which was signed by the commander in chief on October 17th, 2006, in a private Oval Office ceremony, allows the President to declare a "public emergency" and station troops anywhere in America and take control of state-based National Guard units without the consent of the governor or local authorities, in order to "suppress public disorder."

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For the current President, "enforcement of the laws to restore public order" means to commandeer guardsmen from any state, over the objections of local governmental, military and local police entities; ship them off to another state; conscript them in a law enforcement mode; and set them loose against "disorderly" citizenry - protesters, possibly, or those who object to forced vaccinations and quarantines in the event of a bio-terror event.

Originally posted by AGENT_T

And where better to have an Army vulnerable to bribery or treason than in your own back yard when The Prez calls Martial law?.

It would be beneficial to have a bunch of grunts who would sell out their principals and liberties for a promise of overlooked debts..

Hmmm.. the noose tightens