Negotiators agree to cap interest rates for loans to military
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.