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Conferees on the fiscal 2007 defense authorization bill agreed to include an amendment that would cap annual interest rates on loans to U.S. military personnel at 36 percent, despite strong lobbying by banking lobbyists.

Sen. Jim Talent, R-Mo., who originally proposed the language, complained that unscrupulous payday lenders were targeting uniformed personnel, which in effect threatened the country's military readiness. Some troops were paying as much as an 800 percent annual rate on loans.

The banking industry sought language that would carve out federally insured depository institutions from the proposed requirement, arguing they are already regulated by entities such as the Office of the Comptroller of the Currency and National Credit Union Administration.

But, according to a Senate aide, lawmakers only changed the language so the Defense Department would have to consult with banking regulators in devising a rule to execute the legislation.

"The measure will prevent any lender from trying to make a quick buck at the expense of the livelihood and future of those defending our freedom by charging a triple-digit interest rate," Talent said Friday. "For years, our strong coalition of supporters has been steadfast in seeing this measure get this far. Now that the conference has agreed to these new protections for our troops and their families, I'm confident that they will become law."

The provision gives Talent a populist issue to tout in his re-election bid against Democratic challenger Claire McCaskill, the Missouri auditor.

COMMENTS

• Taxpayer, First, in all my posts, you have never seen any comment from me about Congress knowing what is best, about anything, unless satirical. No way, don’t believe it -- but that doesn’t mean I don’t sometimes agree with what they do (and while not often, it does happen). I even agree with you sometimes, just not this time. (I have said I’m an independent and don’t care about the political labels.) And I'm not saying honest businesses can’t make a profit -- they have to in order to stay in business. But, doesn’t it seem a little odd that the payday vultures are saying they can’t make money at even 36 percent, so they are closing up shop around the military bases (please note, only closing around the military bases -- the rest of rural America look out, here they come). I don’t know about you, but if I, or even Warren Buffet, received an annualized 36 percent ROI, I’d be laughing all the way to the bank. Ted Posted October 20, 2006 7:55 AM
• Ted absolutely is correct! The government should make all our decisions because we are incapable of making them and Congress knows best. Heaven forbid the guy next to me should be worried about his debts! Government should prohibit him from getting money legally and force him to worry about getting beat up when he gets home. That way he will stay in the service and in the fighting arena because his debt collectors cannot get to him there! Boy Ted, you sure missed something not getting a college education! Taxpayer Posted October 19, 2006 7:47 AM
• Additional Bottom Line: The existence of technology and home comforts that create a higher standard of living does not automatically entitle everyone to them. The decision to have a cell phone or a satellite dish, cable TV, home computer, more than one car, etc. must be weighed against the obligations of living independently, i.e., buying food, paying the rent or mortgage, paying for utilities, etc. The harsh reality is that many people simply do not make enough money to have all these things, and so have to give up something, but don't. Similarly, the decision to have children ought to take into account one's ability to handle the added expense of caring for them. The fundamental desire to have and love children is, regretfully, not enough. This article focused on our citizens in the military, but the problem isn't unique to them. The solution isn't to legislate special provisions for them, any more than the rest of the country. Some people can afford the standard of living they want, others cannot. Depending on someone else to make your life better for you has never been an effective long-term solution. GovExec.com reader Posted October 10, 2006 10:14 AM