Senator Defends Military Payday Loan Stance, Cap

Historical archive, first published 2006 — payday-lending laws and rates have changed since. Preserved for the record.

Senator Jim Talent (pictured) is involved in a heated race to keep his seat against Democratic challenger, Claire McCaskill.

Earlier this week, talent visited St. Robert to explain his support for a Senate bill, later passed by the Congress, that would military payday loan interest rates at 36 percent for service members.

While Missouri Democrats have attacked Talent’s figure for still being too high, Talent said Tuesday that 36 percent was the figure recommended by the Department of Defense, where officials are concerned about service members who are undeployable because debt problems have caused them to lose their security clearances.

“They get out of boot camp, they go to their first posting, they go to their MOS school, they get their first weekend off, and its very tempting for them to go into a place that promises them a bunch of things and doesn’t tell them the reality of what they are getting into. They borrow a couple of hundred dollars and then they find out they may pay back $1,000 over time."

Talent said 36 percent is “certainly more than enough to make a decent profit” and would “stop the [payday advance] lenders’ abuse in its tracks.”