How financial problems affect the military

TAKING AIM AT DEBT

Military personnel can be particularly vulnerable to predatory lending, a form of "financial quicksand" with excessive fees, constant rollovers and annual interest rates that can hit 300 percent to 400 percent, according to a 2006 study by the Center for Responsible Lending. Among the findings:

-- Predatory lending undermines military readiness and harms morale of troops and their families by trapping them in a cycle of debt.

-- Military recruits are especially susceptible because they're younger and less experienced in money management.

-- Active-duty military personnel in 2005 were three times more likely than civilians to take out a so-called payday loan.

-- Payday lenders often target military bases, clustering offices near the front gates.

-- In 2005, the cost of abusive payday lending fees to active-duty military was estimated at more than $80 million a year.

-- To reduce that impact, Congress last October capped the annual percentage rate at 36 percent for three types of loans to military members: payday loans, tax-refund anticipation loans and vehicle title loans.

(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)