The Navy and the California Reinvestment Coalition (CRC) are working with various banking institutions to provide low-cost consumer loans or “quick consumer loans” to Sailors as an alternative to using payday cash loan lenders.
The Navy has recently coordinated with California government officials and the CRC about providing a safer consumer loan to Sailors to aid in preventing them from getting into financial trouble.
Capt. Mark Patton, commanding officer of Naval Base Point Loma, has taken steps to help by approaching the state congress and also has had talks with California Gov. Arnold Schwarzenegger concerning payday loan issues.
“It is a challenge to offer Sailors accessible and affordable credit,” said Patton. “This will allow us to hold our base banks accountable to provide better products and to help us take care of our own.”
Some of the more serious problems with some faxless online payday loans include annual percentage rates (APR) of up to 400 to 500 percent and no provisions for borrowers to make partial payments.
The proposed basic consumer loan would give Sailors new options such as set interest rates at 30 percent APR and penalty-free partial payments. Not only would the personal loan not exceed 25 percent of the borrower’s income, but also would consist of a loan limit of $500.
“This new system proposal will provide Sailors with the money they need while keeping them from falling deep into debt,” said Keith Kaufman, personal financial management program manager for the Fleet and Family Support Center (FFSC) San Diego.
“USA Federal Credit Union and North Island Credit Union have already contacted the FFSC and informed Sailors that they have a product in the works with reasonable interest rates, realizing they are lending money to people with either low credit or no credit,” said Kaufman.
The new opportunities may negatively affect faxless payday advance lenders in the area. Kaufman has no objections. “Thank you. We never wanted you to do business with our Sailors to begin with.”