Military Access To Payday Loans Should Be Protected; Independent Study Finds No Data To Support Predatory Claims
Military enlisted personnel have the same short-term credit needs as their civilian counterparts, and should not be denied access to payday loans and other short term credit products. So says a study by William O. Brown Jr., Ph.D. of the University of North Carolina Greensboro, and Charles B. Cushman Jr., Ph.D. of George Washington University. The study "Compensation and Short-Term Credit Needs of U.S. Military Enlisted Personnel", was funded by the Consumer Credit Research Foundation, a non-profit research group.
The report's findings refute recent calls for the Department of Defense to limit active duty military personnel's access to Payday Loan products.
According to the report, "Attempts to eradicate some forms of short-term credit through regulation invite perverse and predictable unintended consequences." The study concludes that "A more rational approach is to promote free and highly competitive markets for consumer-credit products of all kinds and to empower consumers to make informed decisions based on valid information appropriate for their own circumstances."
- The pricing of banks’ overdraft-protection services is often not obvious to consumers of these services. Consumers cannot use their financial education to select products best suited for them unless the costs of those products are amply disclosed and unless those products are free of deceptive or hidden material terms.
- Promote robust competition for every form of financial service. Competition drives down prices and increases options for consumers.
- Consumers should have a variety of financial products at their disposal and should be able to make educated and informed decisions based on accurately and fairly disclosed prices and terms.
- There is no principled reason for limiting the access of military enlisted personnel to short-term credit. Both the marketplace and individual data suggest a continuing need and substantial demand for short-term credit among military enlisted personnel.
- There exist no data from which it can reasonably be concluded that military personnel should be denied access to any form of credit that is available to civilians. While certain forms of credit may have lower cost and terms that are more favorable than others, vigorous competition in the marketplace — with terms fully and prominently disclosed — should be adequate to enable intelligent consumer choice.
Source: http://www.rtoonline.com/Content/
The report's findings refute recent calls for the Department of Defense to limit active duty military personnel's access to Payday Loan products.
According to the report, "Attempts to eradicate some forms of short-term credit through regulation invite perverse and predictable unintended consequences." The study concludes that "A more rational approach is to promote free and highly competitive markets for consumer-credit products of all kinds and to empower consumers to make informed decisions based on valid information appropriate for their own circumstances."
- The pricing of banks’ overdraft-protection services is often not obvious to consumers of these services. Consumers cannot use their financial education to select products best suited for them unless the costs of those products are amply disclosed and unless those products are free of deceptive or hidden material terms.
- Promote robust competition for every form of financial service. Competition drives down prices and increases options for consumers.
- Consumers should have a variety of financial products at their disposal and should be able to make educated and informed decisions based on accurately and fairly disclosed prices and terms.
- There is no principled reason for limiting the access of military enlisted personnel to short-term credit. Both the marketplace and individual data suggest a continuing need and substantial demand for short-term credit among military enlisted personnel.
- There exist no data from which it can reasonably be concluded that military personnel should be denied access to any form of credit that is available to civilians. While certain forms of credit may have lower cost and terms that are more favorable than others, vigorous competition in the marketplace — with terms fully and prominently disclosed — should be adequate to enable intelligent consumer choice.
Source: http://www.rtoonline.com/Content/
posted by bradley at 7:03 PM
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