[Congressional Record Volume 161, Number 164 (Wednesday, November 4, 2015)]
[Extensions of Remarks]
[Page E1587]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       EXPRESSING CONCERN WITH FINANCIAL TRAPS AIMED AT VETERANS

                                 ______
                                 

                             HON. JUDY CHU

                             of california

                    in the house of representatives

                      Wednesday, November 4, 2015

  Ms. JUDY CHU of California. Mr. Speaker, I rise today to speak for 
veterans as we approach Veterans Day this year. These brave men and 
women risked their lives to protect us all. Yet, today we have 
companies actively preying on veterans. This is appalling and needs to 
end.
   Some of the worst offenses come from payday lenders. Payday loans 
are high-cost, small-dollar loans, averaging $300 per loan. What makes 
these loans so dangerous is that they have average interest rates in 
the triple digits--at times as high as 391 percent. If at the end of 
the loan period, which typically spans two weeks or the next payday, 
the borrower cannot pay it off, he or she will be forced to take out 
another loan to pay off the first loan in addition to the exorbitant 
accumulated interest. This is the beginning of a cycle of debt.
   Veterans are highly susceptible to these practices and have become a 
customer base for these loan schemes. In fact, payday lenders have been 
known to set up around military bases. In 2006, Congress passed the 
Military Lending Act to cap interest rates for military loans, but even 
so, these lenders find ways to exploit servicemembers, veterans, and 
military families. One study found that 10 percent of veterans leave 
military service with more than $40,000 in debt. If our men and women 
heed the call to defend our country, they should not be led to 
financial traps that could prevent them from transitioning to civilian 
life successfully.
   This Veterans Day, I stand with veterans and urge both the private 
lending sector and Congress to do more to protect our veterans, who 
deserve our utmost respect.

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