WASHINGTON - The Defense Department is recommending that Congress narrow a law designed to protect military service members and their families from abusive payday loans. In a report to the Senate Armed Services Committee, the department said that the so-called Talent amendment, which caps interest rates on payday, vehicle title, and refund-anticipation loans, has mostly worked well.
But it also recommended that Congress take the suggestion of HSBC North America Inc., which has urged the Defense Department to better define those eligible for the cap.
At issue is how financial institutions determine if consumers fall under the Talent amendment's scope. Banks and credit unions have complained they have difficulty determining whether a loan applicant is in the military or qualifies as a dependent.
In its report, the Defense Department said lenders should have access to the Defense Manpower Data Center, a database used to track those eligible for military benefits. Anyone in the database would be covered under the Talent amendment, the department said.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
