Payday Loan Times

At Fort Campbell in Tennessee, those in charge of the 28,000 soldiers stationed there were glad to see Congress pass a bill limiting rates on military payday loans.

President Bush is expected to sign it into law today.

"I've never seen so many … loan companies as I do within 30 miles of military bases," Sgt. Joshua Milligan told The Tennesseean. "People try to rip off soldiers because they're vulnerable, and they have nice fixed incomes. They know they'll be paid."

The Army post in Clarksville offers counseling to soldiers who get too far into debt, but Fort Campbell spokeswoman Cathy Gramling could not say how many use the service.

Overall, Tennessee is home to 1,428 fast cash advance lenders that can charge fees up to 15 percent on two-week loans, according to the state's Department of Financial Institutions. Fees are capped at $30 per loan, and patrons are limited to two outstanding loans or a total of $500 in outstanding debt at one time.

At 15 percent, the annual interest rate on these personal loans amounts to more than 390 percent, assuming the borrower renews the loan every two weeks, according to Stephen Henley, a director in the department.

According to the department's 2005 annual report, lenders reported 4.6 million payday loan transactions worth a total of $990 million. The majority of such payday cash advances were for amounts between $151 and $250.