San Diego, CA - The 2005
Washington State Legislature amended, the Act Relating to
Check Cashers and Sellers, otherwise known as payday
lenders and it became effective July 24, 2005. The changes
specifically address making loans to military borrowers. A
letter from the Department of Financial Institutions,
Division of Consumer Services alerted all licensed check
cashers and sellers with general information about this
new amendment. It basically limits their collection
activity while a service member is deployed.
A military borrower is defined as, "an active duty member
of the armed forces of the United States or any member of
the national guard or the reserves of the armed forces of
the United States who has been called to active duty."
Pursuant to the amendment:
"(1) A licensee shall: (a) When collecting any delinquent
small loan, not garnish any wages or salary paid for
service in the armed forces;
(b) Defer for the duration of the posting all collection
activity against a military borrower who has been deployed
to a combat or combat support posting for the duration of
the posting;
(c) Not contact the military chain of command of a
military borrower in an effort to collect a delinquent
small loan;
(d) Honor the terms of any repayment agreement between the
licensee and any military borrower, including any
repayment agreement negotiated through military counselors
or third party credit counselors; and
(e) Not make a loan from a specific location to a person
that the licensee knows is a military borrower when the
military borrower's commander has notified the licensee in
writing that the specific location is designated
off-limits to military personnel under their command."
Importantly, these rules only come into play if a service
member enters into an agreement with a payday lender in
Washington.
This is a positive development, however for all members of
the military who finds themselves caught between the
proverbial rock and a hard place, there is a responsible
alternative. Below is a press release about Pioneer
Services "Help Loans" for service members. It is a welcome
alternative to payday lending, which often targets and
traps members of the military, and an example of Pioneer
Services commitment to providing financial independence
for military families. To ensure that service
members are receiving the best financial education
possible, ALL Pioneer Services field personnel must be
ICFE Certified Credit Report Reviewers. Additionally many
of their personnel are also ICFE Certified Identity Theft
Prevention Specialists and some have attained Accredited
Financial Counselor (AFC) status with the AFCPE (AFCPE.org).
Pioneer Services has also initiated a curriculum called
"Break the Debt Cycle" and they are partnering with Park
University to provide on-line training and certification
for service members. For more information about Help
Loans, contact your local Pioneer Services Representative.
Full text of Pioneer Services Help Loans Press Release:
Pioneer Services 'Help Loan' a Responsible Alternative to
Payday Loans
KANSAS CITY, MO - In order to offer an alternative to
payday loans, Pioneer Services created the "Help Loan" in
2003. This short-term installment loan is a one-time loan
of $500 with only $25.24 in interest and fees, payable in
four monthly installments with a 30-day grace period until
the first payment. It offers a disciplined and financially
responsible way for service members to get money for
unforeseen expenses and comes with the standard Pioneer
Services 15 day no-cost satisfaction guarantee.
"The Help Loan was created to give service members an
alternative to payday loans that is fiscally sound,
affordable, and can't be rolled over," said Pat McCarty,
Executive Vice President for Military Relations "It's a
terrific way for military families to obtain emergency
funds without getting caught in a never-ending cycle of
debt, something that happens frequently with payday loans,
check cashing services and title loans."
The Help Loan has been available for two years and is one
of the many Pioneer Services available to help service
members meet their cash needs and keep their focus on
their jobs rather than worrying about financial issues.
Recent studies have also suggested that predatory and
questionable lending practices target the military
community, putting service members in financial harm's
way.
One such study, Predatory Lending and the Military: The
Law and Geography of "Payday" Loans in Military Towns,
conducted by a pair of university professors, claims there
is "irrefutable geographic evidence" that payday lenders
actively and aggressively target military personnel.
"Because predatory lending practices have become a huge
issue for military families, we are proactively marketing
the Help Loan as a better alternative," said McCarty.
For more information about Pioneer Services visit their
Web site. For more information about how to protect
against predatory lending and to read the study, go to
ResponsibleLending.org