The payday loan companies are finally coming under fire from the federal government and for good reason. The Pentagon is quite correct when it says that these companies prey on military personnel and need to be watched closely. As previously reported, payday loan outlets are popping up around military bases, including locations in Alabama. The business model for the industry indicates they like to locate around military installations. That has been a practice since the start of these companies. Obviously, a lot of their customer base is located in those locations. Military families are prime targets for these predatory lenders. Payday lending is a growing business in east Alabama because of Fort Benning, which as you probably know, is located outside Columbus, Georgia. Because of Georgia’s tougher laws against predatory lenders, the lenders set up shop in Alabama. The payday lenders have a growing reputation for taking advantage of military personnel and their families. Considering how most folks strongly support the military, it’s impossible to understand how the payday lenders could possibly feel good about taking advantage of military families.
The payday loan business is known for its sky-high interest rates. The Pentagon asked Congress to cap the lending rate for military personnel at 36% and Congress was forced to respond. More will be said on that development in the Arbitration Section. As you may know, Payday loans have already been outlawed in many states, including Georgia. They are regulated in Alabama, but in a very weak fashion. In fact, what Alabama did really isn’t true regulation. Most consumer groups say Alabama’s law was an industry-sponsored measure that does little for persons who get loans from payday loan operations. There was some relief in Congress, and I will write on that in the section on arbitration.
