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DoD seeks troop input on predatory lending

The Defense Department is looking for suggestions about what additional steps could be taken to protect service members from problems with consumer loans.

In particular, defense officials want to know if there are particular hazards for service members and their families from installment loans that may have excessive fees and high interest rates, from credit cards that combine high fees with small credit limits, and from overdraft protection that includes high fees.

The Pentagon is seeking comments in response to a Senate Armed Services Committee request to determine whether Congress went far enough last year to protect troops by placing a 36 percent interest rate cap on short-term loans to service members.

In its June 5 report on the 2008 defense policy bill, the armed services committee said eliminating predatory lending practices that target service members is a “complex problem” that could involve more than the payday loans and other short-term loan operations directly affected by the interest-rate cap.

The Senate committee asked for a report by April 1 on what other regulatory or statutory changes in law might be needed to protect service members, which is what prompted the Defense Department to ask service members and the public for comment. The deadline for submitting comments and suggestions is Feb. 25.

Comments can be submitted by mail by writing to: Federal Docket Management System Office, 1160 Defense Pentagon, Washington, DC 20301-1160, or online through the Federal Register comment submission system. The regulation information number, needed to make a comment on the site, is DoD-2006-0S-0216.