The Department of Defense is expected to issue a report any day that is highly critical of payday lenders, pawnshops and other high-cost financial service providers preying on enlisted personnel, a well-placed Pentagon official said during NAFCU's annual convention.
Col. Michael Pachuta, director of morale, welfare and recreation policy for the Undersecretary of Defense, said the much-anticipated report will make numerous recommendations, including that providers of short-term loans make detailed disclosures of effective percentage rates; that Congress set maximum rates and set limits on how loans may be secured; and that lenders include clauses enabling borrowers to legally challenge unfair lending practices.
The report is expected to serve as a basis for anti-predatory loan legislation currently working its way through Congress.
