Panel votes to dump delay in military lending rules

Panel votes to dump delay in military lending rules

House lawmakers narrowly voted to remove controversial language delaying new rules on payday lenders from their annual defense authorization bill early Thursday morning, calming concerns from advocates who saw the move as potentially undoing financial protections for military families.

By a 32 to 30 vote, members of the House Armed Services Committee stripped provisions from the legislation that would have delayed Defense Department plans to expand the scope of the 2006 Military Lending Act by requiring a new report due next spring on DoD’s rule-making procedures in that regard.

Opponents of the clause said the rules are already long overdue, and accused supporters of giving predatory lenders a new opportunity to victimize troops.

“Each day we delay, we put more service members in harm’s way,” said Rep. Tammy Duckworth, D-Ill., who led efforts to remove the provisions.

But proponents of the move said they worry that legitimate lenders are being caught up in the efforts to protect troops, hurting those companies as well as troops and families in need of short-term loans.

They argued the new report would not create a significant delay but would ensure defense officials haven’t overreached on trying to root out problematic loans.

The 2006 lending law was passed by Congress after reports of payday lenders charging unusually high interest rates to troops — 400 percent or more, in some cases — and misleading borrowers about the long-term debt they could incur.

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