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RSSPosts Tagged ‘N.C. House Bill 810’
Payday Lending Bill Smells – Doug Wilburn
June 11th, 2011
Doug Wilburn is a Vietnam veteran and former congressional chief of staff. He spent 10 years in the Navy
Doug Wilbert writes: “It seems that there have always been storefront lenders outside the main gate of our military installations. We civilians drive by and we never give a thought as to the collection of small businesses, the pawn shops, cut-rate car dealers, payday loan shops, automobile title loaners mixed in with the bars and strip clubs.
From inside the base
“But these establishments are not forgotten inside the base by the commanders, officers and soldiers. These are the businesses who loan money through various means at up to 36 percent interest. And it’s the people inside the base who are the ‘customers’ for loans. At the moment these loans are capped at $600, but N.C. House Bill 810 would raise that cap to $1,500. These businesses hurt the ones inside the base.
Those in the base
“The kids inside the base are away from home, most for the first time, and who are on their own for the first time. They have graduated from the discipline of boot camp or basic training and they are now wise, mature and worldly. There is nothing more naïve than a wise and worldly young E-2, E-3 or E-4.
Here’s the scam
“A young seaman is on liberty in town a few days before payday. He’s come up a little short and he wants to impress the girl he’s just met. So he goes into one of the jewelry stores on San Diego’s Lower Broadway. He changes his blues for civilian clothes and buys a diamond ring for $75 (this is a while back), puts down five bucks and signs a promissory note to pay a certain amount each payday. Then he goes around the corner to the pawn shop next to Tahiti Felix’s Tattoo Parlor where he pawns the ring for 50 bucks. The sailor goes on his way, now heavy with cash, and the pawn shop owner goes through an inside door and hands the ring to the jeweler who puts it back in the display case, ready for the next fish to swim in.
Everyone is happy
“The sailor’s happy, the pawn shop guy’s happy and the jeweler is definitely happy because he’s got the promissory note.
Comes payday
“The problem comes on the next payday or the payday after when the sailor forgets to or can’t make his payment. That’s when the door slams and the first indebtedness letter arrives at mail call. It will usually say something to the effect that if the sailor doesn’t pay his payment plus the interest, the jeweler will write his commanding officer and not only will the sailor’s career be ruined, but he could face the court system and possibly jail time.
Now there’s a problem
“The sailor has a few options: he can pay off the loan in full, he can make the required payment along with interest at a rate that would make Shylock blush, or, more likely, ignore the letter and the ones that follow each week until he either tells his division petty officer and seeks help or he panics, buys another ring to pay off the debt and it starts all over again, only this time for a much larger sum.
These are our kids!
“The system hits our young service people where they are most vulnerable, in their pocketbooks. They don’t make much money to begin with and, like most of our kids, don’t know how to manage what they do have.
The impact on military readiness
“The whole financial mess provides a major distraction to those who are impacted when the military requires their undivided attention in accomplishing the missions their units have been tasked with. It bleeds our military and to say that these businesses only provide a service to help our kids over some temporary rough patches in their new military life is ludicrous.
N.C. House Bill 810
“That our state legislature would even consider bringing such a travesty as HB 810 to the floor floors me. Base commanders all over the state of North Carolina and in the other 49 states should rail against N.C. House Bill 810. These are our kids and this is our defense force.
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