Payday Loan Writer
War is bad enough, Alexi Giannoulias, argues - soldiers shouldn't have to return home to high-interest military payday loan payments, as well.
Giannoulias is a Democratic candidate for Illinois treasurer. He wants to make bank loans easier to obtain for state soldiers, especially those who muster out of the service after returning from Iraq or Afghanistan.
During a press conference Friday in Belleville, Giannoulias outlined a plan to supplement current faxless payday loan programs for members or past members of the Illinois National Guard and Illinois residents who are members of the U.S. Army Reserve. To be eligible, a member of the military must be within six months of leaving the service.
If elected, Giannoulias said he would offer bankers the incentive of having state funds deposited in their banks if they will offer $10,000 loans at up to 7 percent to military personnel. He wants to reduce the amount eventually owed via military payday loans.
"If applicants have even the slightest blemish on their credit report or lack the necessary collateral, loans will be denied," said Giannoulias. "Our military personnel should not have to take out a high-interest loan from a payday loan store to cover their living expenses and wind up in an endless cycle of debt," he said.
The proposed plan will increase the repayment period from 24 to 36 months. Giannoulias cited a December 2004 New York Times study that showed up to 26 percent of military personnel have gone to payday advance loan facilities to get money.
Giannoulias said his plan will NOT cost taxpayers. Bankers will be encouraged to make riskier loans at up to 7 percent in return for having state funds deposited in their banks.
"The state treasurer's office will deposit funds into that financial institution," he said of bankers willing to participate in the program.