[Congressional Record Volume 151, Number 95 (Thursday, July 14, 2005)]
[Extensions of Remarks]
[Page E1487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                H.R. 458

                                 ______
                                 

                          HON. WALTER B. JONES

                           of north carolina

                    in the house of representatives

                        Thursday, July 14, 2005

  Mr. JONES of North Carolina. Mr. Speaker, Title Two of H.R. 458 is 
most important to those of us who represent districts with a heavy 
military presence.
  It regulates so-called ``military lenders,'' and protects 
servicemembers from abusive marketing and collection practices by high-
cost lenders that are typically clustered outside of military 
installations, and who increasingly operate on the Internet. It also 
regulates title lenders and high-cost lenders that charge hidden fees 
and who frequently refinance loans to generate even more fees. 
Importantly, it codifies industry best practices rules for payday 
advance lenders.
  Today's Armed Forces are the most effective in the history of the 
world. They have the same credit needs as the rest of us, but are 
uniquely vulnerable to abusive marketing and collection practices.
  Many of the young men and women who have volunteered to serve in our 
military have limited experience in handling financial matters. They 
have relatively low incomes and can easily fall into debt and have to 
borrow to help pay expenses. Quite often, they have difficulty 
borrowing from traditional lenders and have to seek higher-cost credit 
from specialty lenders such as small loan companies, payday lenders, or 
finance companies. When relatively unsophisticated borrowers are unable 
to readily repay a loan from these lenders, they can become consumed 
with worries over their debt and this undercuts their abilities to 
fulfill their military duties.
  Mr. Speaker, the New York Times pointed out abusive lending practices 
by companies like Pioneer Financial, a Missouri-based high-cost lender 
which exclusively targets services members, and according to Securities 
and Exchange Commission filings, employs a loophole to get around the 
Servicemembers Civil Relief Act (SCRA). According to that paper, 
Pioneer charges high rates and hidden fees and has the policy of 
refinancing their existing loans within the first year for the express 
purpose of generating more fees. Unfortunately, it's not just one 
company like Pioneer that requires servicemembers to prey on our Armed 
Forces personnel. Various types of creditors, including finance 
companies, small loan companies, payday lenders and others, have 
perpetrated abusive lending practices.
  That is why this legislation, and Title Two in particular, is so 
important. Our men and women in uniform have earned the protections 
that H.R. 458 will provide them.

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