In Ohio, there are more than 650 payday or car title loan stores. Their loans saddle borrowers with interest rates that regularly top 600 percent, and often trap borrowers in a downward spiral of debt. More than 75 percent of loans go to borrowers who take out 11 or more loans each year.
And we know these companies often target military families and veterans.
That’s why we passed the Military Lending Act thirteen years ago, capping the interest rate on any loans to active-duty servicemembers and their families at 36 percent.
But under the Trump Administration, the Consumer Financial Protection Bureau has stopped the examinations that make sure these shady outfits are following the law and aren’t preying on servicemembers. And the original law left veterans, surviving family members, and other Ohioans behind.
That’s why I’m introducing the Veterans and Consumers Fair Credit Act, to protect all Ohioans – including veterans – from shady, abusive lenders.
Our bill would extend the 36 percent interest rate cap to all consumers, including the veterans and Gold Star families left out of the original law.
Of course people sometimes need to borrow money in an emergency – one in four Americans say they couldn’t come up with $400 in an emergency without borrowing money. But the solution to families’ financial struggles isn’t payday loans and car title loans – it’s raising wages, it’s tackling the cost of housing and childcare that eat up family’s paychecks, and it’s letting people claim a one-time advance on their EITC payment, as another one of my bills would do.
This bill has the support of veterans’ groups and civil rights organizations, including the American Legion, the National Military Families Association, Iraq and Afghanistan Veterans of America, and the NAACP.
This Veterans Day, let’s make it clear – you can’t scam veterans, or any other Ohioans, with abusive loans that trap people in debt.