Guest opinion: I-164 would protect families from usurious rates

2010-10-18T00:05:00Z Guest opinion: I-164 would protect families from usurious ratesJOHN BULLSHOWS and MATT DEUTSCHER The Billings Gazette
October 18, 2010 12:05 am  • 

Back in 2006, the U.S. military did the right thing. It took action to protect military families by capping the interest rates on predatory payday and car title loans. Now Montana voters are poised to do the same.

By voting for Initiative 164 this year, Montanans will be helping to protect their fellow citizens from abusive loan practices that trap people in debt and hurt our economy. As veterans and Montanans we are glad we have the opportunity to follow the military’s fine example.

The military cap came about after the U.S. Department of Defense issued a report on “Predatory Lending Practices Directed at Members of the Armed Forces and Their Dependents.” The documented detailed how predatory lenders were targeting military personnel by locating loan shops in clusters near military bases, and how these loans resulted in financial hardships that took a toll on our troops’ morale and military readiness.

Rather than helping borrowers though a financial shortfall, the department determined that these loans created a cycle of debt that’s difficult to escape. Additionally, the stress and fear caused by these loans was undermining the nation’s military readiness.

The report said: “Many of our youngsters must attain and maintain security clearances that demand complete and unquestionable integrity. A service member saddled with debt, fear and considerable stress could suddenly find his integrity compromised. His job performance will probably suffer, and he most likely will lose his security clearance and be temporarily removed from his assignment.”

The department called on Congress to take action “to protect service members from unfair and deceptive lending practices and usurious interest rates.” The result was a 36-percent annual interest rate cap on these loans when made to military families.

Initiative 164 would provide the same cap on loans made to all Montana families, not just those in the military. The initiative will protect Montana families from these predatory loan practices. We believe 400 percent interest is just too high when many Montana families are struggling to get by. Any of us could need an emergency loan to pay for anything from medical emergencies to car repairs. Predatory lenders take advantage of those who are already struggling.

Voting for I-164 will help our economy, too. Keeping people in debt prevents our economy from getting moving again. You can’t spend money on local goods and services when you’re struggling to repay loans with triple-digit interest rates. Seven out of 10 Montana loan shops are owned by out-of-state corporations that drain millions of dollars from our local economy each year.

The successful petition drive that put I-164 on the ballot shows that Montanans agree on this issue: 400 percent is too high and we must put a stop to it. Please vote yes for I-164.

John Bullshows of Billings served in the U.S. Army in the Vietnam war. Matt Deutscher of Billings is a U.S. Army veteran of the Iraq war.

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