Nearly seven years after the Military Lending Act came into effect, government authorities say that the law has gaps that threaten to leave hundreds of thousands of service members across the country vulnerable to potentially predatory loans — from credit pitched by retailers to pay for electronics or furniture, to auto-title loans to payday-style loans, the New York Times reported on Friday. The law, the authorities say, has not kept pace with high-interest lenders that focus on servicemen and women, both online and near bases. The short-term loans not covered under the law’s interest rate cap of 36 percent include loans for more than $2,000, loans that last for more than 91 days and auto-title loans with terms longer than 181 days. While it is difficult to determine how many members of the military are struggling with loans not covered by the law, interviews with military charities in five states and more than two dozen service members — many of whom declined to be named for fear that disclosing their identity would cost them their security clearances — indicate that the problem is spreading. “Service members just get trapped in an endless cycle of debt,” said Michael S. Archer, director of military legal assistance for the Marine Corps Installations East. Shouldering the loans can catapult service members into foreclosure and imperil their jobs, as the military considers high personal indebtedness a threat to national security.
http://dealbook.nytimes.com/2013/11/21/service-members-left-vulnerable-…
For more on protections afforded to members of the military and to find out more about financial relief extended to service members, be sure to pick up a copy of ABI’s Bankruptcy and Debt under the Servicemembers Civil Relief Act in the ABI Bookstore.