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Predatory lending hurts Arizona’s veterans

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Veterans, military service members, and their families suffer serious harm when predatory lenders target them with unscrupulously high interest rates. Currently, Arizona law allows predatory lenders to charge rates of over 200% APR. We believe this needs to change.

Transitioning from the military to civilian life is often a difficult task for veterans. And learning to manage money after many necessities have been provided for them is often one of the most difficult parts of this transition process.

Additionally, many post-9/11 veterans have returned to a rough economy with stagnant incomes and a wildly fluctuating job market, so it is easy to understand why veterans face more financial challenges after leaving uniformed service.

The push to protect the financial lives of veterans has taken on new urgency in the last few years because these predatory lenders have figured out how to take advantage of this reality.

We are Vietnam era veterans who served our country in wartime. Coming home and reintegrating into civilian life was tough for many veterans back in those days, but the one challenge we did not face was unscrupulous “loan sharks” who were allowed to charge sky-high interest rates to people struggling to make ends meet.

Today, it is not legal to charge current service members an interest rate higher than 36%, thanks to the Military Lending Act. But the Act only protects current service members, and ignores veterans who have served our country. We have a solution.

Right here in Arizona, the Military Officers Association of America state council and the Southwest Veterans Chamber of Commerce support the Arizona Fair Lending Act, which would cap car title lending at 36%.  Today, title loan companies charge our veterans up to 204% for a loan against their car – loans that national statistics show result in a debt trap and in many cases, the borrower ends up seeing their vehicle repossessed.

MOAA and the Veterans Chamber of Commerce support lowering car title loan interest rates because we realize that “supporting our troops” doesn’t end once they come home. It includes defending them against those waiting to take advantage of the stress, confusion, and financial strain that reintegration brings.

This Veterans Day, resolve to support the statewide ballot initiative to cap car title loans at 36%. In doing so, you resolve to support our Veterans. About 1.4 million veterans are at risk of homelessness because of poverty or a lack of support networks in their communities, according to the National Coalition for Homeless Veterans.

There is help for these veterans, but it doesn’t come from taking out a loan with a 200% interest rate. The Army Emergency Relief program gives grants and no-interest loans to active duty and retired soldiers who can document a financial need. The group has provided more than $1 billion in assistance to soldiers and veterans since 9/11. The nonprofit USA Cares offers fast financial help to veterans in need, responding within 48 hours of receiving a request.

We are proud of the men and women who served our country’s uniform. We support the Arizona Fair Lending Act because those veterans deserve to be protected from predatory lenders.

Lee Lange is with the Southwest Veterans Chamber of Commerce and David Lucier is with the Arizona Veterans Hall of Fame.

This commentary has been revised to clarify that the Army Emergency Relief program gives grants and no-interest loans to active duty and retired soldiers who can document a financial need, and the program has provided more than $1 billion – not $600 million as originally reported – since 9/11. 

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