4 Jax Air News, NAS Jacksonville, Thursday, March 30, 2006 Payday loans can cause financial disaster for borrowers By Kaylee LaRocque Staff Writer Military members and their families are being targeted by a growing industry that provides fast cash for those naive enough to fill out the paperwork and supply com- panies access to their bank accounts. These companies, called payday lenders or predatory lenders, can be found virtu- ally everywhere these days - on the Internet, in mili- tary publications, in kiosks at shopping malls and in small shops in local neigh- borhoods. It's easy to obtain the money, but it's not so easy to pay it back, especially when these companies charge interest rates that can easily exceed 400 per- cent. While some people may think these short-term loans are needed and that they will have no problem paying them back, they often find this is not the case. Often a loan is rolled over and over and the cost By Kaylee LaRocque Staff Writer S tate law prohibits a deferred presentment provider (the business) from allowing you to "roll over" your deferred presentment transaction. This means that you cannot be asked or required to pay an additional feev in order to further delay the deposit or presentment of your check for payment. If you inform the provider in person that you cannot cover the check or pay in-full the amount owed at the end of the term of the agreement. you will receive a grace period extending the term of the agreement for an addi- tional 60 days after the original termination date with- just escalates. "Payday lenders are bad news. They target those people who live paycheck to paycheck and who are not well-informed about finan- cial management. In this country, many people need to have access to cash before paydays. They basi- cally have three options - use a credit card, wait until payday to get what they need or take out a short term loan," said Dave Faraldo, director of the Navy and Marine Corps Relief Society (NMCRS) at NAS Jacksonville. "Unfortunately, many peo- ple don't have a lot of options and don't know where to go for-help so they go to one of these business- es, write a post-dated check. They are then given the cash to tide them over until payday when the company deposits that check," explained Faraldo. "What they don't realize is that these companies charge an out any additional charge. The deferred presentment provider shall require that you, as a condition of obtaining the grace period, com- plete consumer credit counseling offered by an agency included on a list that will be given to you by the provider. You may also agree to comply with and adhere to a repayment plan approved by that agency. If you do not comply with and adhere to a repayment plan approved by that agency, the provider may deposit or present your check for payment and pursue all legally available civil means to enforce the debt at he end of the 60-day grace period. extremely high interest rate, in addition to service charges. When that check is deposited, it all comes out of the account at once. So, much of their paycheck is already spent and now how do they pay their bills, rent and buy groceries? They go do it again and now they are in the trap. And, there is no easy way out," he continued. Unfortunately, a lot of mil- itary members and their families are getting caught up in the trap. But, the good Prepping to launch An aviation boatswain's mate directs a S-3B Viking assigned to the "Maulers" of VS-32 to a catapult in preparation for launch from the flight deck aboard the nuclear powered aircraft carrier USS Enterprise (CVN 65) March 13. Enterprise and embarked Carrier Air Wing One are currently under way, con- ducting Composite Training Unit Exercise. Photo by PHANJhi Scott news is the military is tak- ing action. The Department of Defense recently announced 10 items they thought state legislators should pay attention to - one being payday loans. According to Under Secretary of Defense (Personnel and Readiness) Dr. David S.C. Chu, payday lending practices are proven to be detrimental to military service members who have chosen to use them to meet their immediate cash needs. He is currently calling for state laws that stop small interest loans, cap their rates and establish ceilings and protect the service members. "The problem is that state laws don't necessarily solve the issue. They can pass state laws in Florida but who does it apply to the people living here or the banks chartered in Florida? The difficulty for military personnel is, let's say the payday lending is chartered through a bank in Wilmington, Del. The bor- rower banks with Navy Federal Credit Union which is based in Arlington, Va. and they are stationed Florida law guidelines on payday lenders 2105 PLSRK AVENUE-SUITE 7 - 0R4NGE PA.RK'. FL 32073-5557 -CA.LL 3OJ 1I F X 90.d 176 391 PPALw* -BEhLLS.LD TH NET e re on active duty forTRICARE families. Active duty and retired members of the military along with their families and survivors have access to all seven Solantic walk-in urgent care locations in % % the Jacksonville area. So, when you or a family member require urgent care, we're here to help you get better.Stop by and learn a new meaning for,"Attention." Whether you have a fever, sprain, cut or burn, we have convenient locations all over town for your family's urgent care needs. You never need an appointment. And our staff of professionals will make sure you're feeling better and on your way fast. Our on-site facilities and Solantic Rx pharmacy services keep you from running around for things like lab samples and cultures, X-rays or common We even make paying a less stressful experience, because you'll know from the start that you're covered byTRICARE. So when you're not feeling well, come see us. We'll put you at ease. in no time. Doesn't that make you feel better? ^solantic walk-in urgent care Great care. Fast and fair. RV IV aboard USS John F. Kennedy Now, which states' laws are applicable? Delaware, Virginia, Florida, all of them or none of them? We need to make this a fed- eral legislation/regulation," stated Faraldo. "In my opinion, the laws where the borrower is phys- ically located should dictate. A good example are speed- ing laws. Some states have speed limits higher than others. Well, if you have a driver's license from one of those states, it doesn't mean you can go to another state and drive your state's speed limits. You have to follow the laws of the state you are in. I think it should be the same way with payday lend- ing," he continued. According to Faraldo, the payday lending industry is booming. "There are more than 25,000 payday lending agencies in this country now. It's a multi-billion dol- lar industry. The military needs to step forward and make it more difficult for our service members and their families to use these places," said Faraldo, emphatically. "The military is unique in that we have a lot of other options available the NMCRS offers loans at zero interest rates, we have on base credit unions and banks, command financial specialists and our young Sailors are required to attend a personal financial management class after boot camp. We spend a lot of effort and money to educate people. Yet, we allow them to go to these places," he added. According to a study con- ducted by the Center for See PAYDAY,LOANS, Page 13