A new series of rules is meant to give even more financial protection to service members and their families. But where does the spending babysitting stop and the personal responsibility begin?
Currently on the books are three sets of rules or help. First, you have the Service Members Civil Relief Act (SCRA) that protects service members from high interest rates, among other things. Then there is the military arm of the Consumer Protection Bureau, a federal entity led by Holly Petraeus. They work as a watchdog to pursue and help prosecute predatory lenders.
Finally, you have the 2006 Military Lending Act. Those rules helped protect service members from predatory loans and the interest rates associated with them.
Now the administration, through an executive order, has expanded the types of loans covered by the Lending Act.
Among the changes are a 36 percent annual cap on the percentage rate of interest on products like credit cards, a requirement that creditors disclose a service member’s other lending options beyond high-cost credit and prohibiting creditors from requiring service members to submit to arbitration.
Many of the changes address problems brought to light in this Washington Post story on rent-to-own lender USA Discounters (which recently changed its name to USA Living). You have without a doubt seen their stores near the gate of your local military base. The store sells items to service members, many of them young with lacking financial savvy, at high interest. If a service member fails to pay, the store takes them to court in Virginia, regardless of whether the service member can be present to defend him or herself.
Curbing predatory lending practices is, without a doubt, a good thing. But some have questioned why these protections are expanding only for the military. They say this creates a "special class" of people. If these protections make sense for service members, why wouldn't they make sense for everyone else, too?
And Petraeus says that's OK.
“I would say, as far as I’m concerned, the military is a special class. It’s not just a job. They’re willing to lay their lives on the line for our country. If they’re given special protections, I’m all for it," she said at a recent event here at Fort Campbell.
What do you think? Should these protections be given to everyone? Or is the military a special enough group of people they we need these extra protections?