For soldiers sometimes still in their teens, the dozens of financial services operators that surround Fort Campbell (Kentucky) and other military outposts are a gantlet to run every time they step off government property, the New York Times reported. The results are alarming: The post’s own newspaper reported that in recent years, 40 percent of its soldiers had at least one predatory loan. Often, they owe the loans to business owners who were once in the military themselves. The Department of Defense, regulators and elected officials are well aware of the perils. Financially troubled soldiers may not be at their best, and money problems can cost them security clearances that are crucial to their jobs. So for decades, the government has fought to fend off cheaters, charlatans and others who wish to get their claws into military paychecks. Watchdogs are deeply concerned. This month, the Consumer Financial Protection Bureau issued a warning about so-called allotments, a system that allows lenders to siphon money directly from soldiers’ paychecks. It also published a report noting that service member complaints rose 19 percent from 2019 to 2021, the majority of them related to debt collection and the credit reporting that tracks those debts. With prices rising for almost everything, including cars and food and gas, the opportunities for lenders to profit from military personnel have only grown. And such customers are becoming even more enticing as branches of the armed forces increase sign-up bonuses to better attract recruits. Attempts to address the problem run into one unavoidable obstacle: Young and financially inexperienced members of the military are ideal clients. They are not highly paid, but their jobs are all but guaranteed — so their paychecks arrive like clockwork.
