Thousands of Troops Barred from Overseas Duty Because of High Personal Debt

At a time when our armed forces are stretched thin from fighting two wars, thousands of American troops are being barred from oversea duty because of such high personal debt that they are considered security risks, according to a review of military records by The Associated Press. Security clearances are revoked when service members' debt payments total 30 to 40 percent of their salary. The exact amount depends on the military branch.




According to Rear Admiral Len Hering, Sr., many of these soldiers fall victim to predatory lending practices which charge exorbitant interest rates for short term cash loans. These rates are typically in the triple digit range, from 300% to 600% monthly. The most egregious rate uncovered was 1180% per month.

There are several factors that lead to this dilemma: the lack of business acumen on the part of young recruits, reckless spending spurred by the natural high of returning from a tour of duty, and the proliferation of "payday lenders" that allow troops to borrow against their future paychecks. President Bush has recently signed legislation limiting interest rates on these types of loans.

We've all seen the ads on TV - the smiling young couple walking out the door of one of these shysters, happy because they just mortgaged their car for a few hundred bucks. It's a sad situation. These loansharks should be put out of business for their usurious practices.

Related News Links:
www.nytimes.com
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[edit on 10/24/2006 by 12m8keall2c]

[edit on 24-10-2006 by jsobecky]

they should be paying their men enough to provide for their families????

does sound like a good way to get out of going to war though, huh? I mean, don't want to fight, go on a wild shopping spree....

one thing I've learned from my son's finances though....they really should give these kids a few heavy duty courses on money management.....they can start with my kid...I'm about given up on yelling at him about it.

[edit on 24-10-2006 by dawnstar]

Brilliant, if you're a soldier and don't want to go to Iraq, take out a big loan and make sure you stay at home with your family.

Youd have thought they would have wanted to keep this policy quiet.

Well, the Rear Admiral did say that there hasn't been a single case yet of someone intentionally running up debt to evade deployment, but I suppose it could happen.

Those interest rates are outrageous! I thought usury was illegal.

Originally posted by jsobecky

I thought usury was illegal.

Our entire economic system is based on usury.

en.wiktionary.org...

4th Century BCE - Aristotle - Politics, Book I, Part X,

"The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not form the natural object of it. For money was intended to be used in exchange, but not to increase at interest."

My question:

Why has loans and credit card marketing surged to such a high and predatory level in the last few years?


.

Depends on the state. Here in Missouri, it's legal. Over in Kansas, it's not as legal. I don't know the specifics, but you see way more title loan type places here. I'd rather have my legs broken than pay out 300% APR.

Why has loans and credit card marketing surged to such a high and predatory level in the last few years?

Gotta get what they can while the gettin's good.

Originally posted by jsobecky

The Pentagon contends that financial problems can distract troops from their duties or make them vulnerable to bribery and treason.

And where better to have an Army vulnerable to bribery or treason than in your own back yard when The Prez calls Martial law?.

It would be beneficial to have a bunch of grunts who would sell out their principals and liberties for a promise of overlooked debts..

Hmmm.. the noose tightens

Here's a link to a related discussion on ATS.

www.abovetopsecret.com...

Originally posted by soficrow
Our entire economic system is based on usury.

en.wiktionary.org...

4th Century BCE - Aristotle - Politics, Book I, Part X,

"The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not form the natural object of it. For money was intended to be used in exchange, but not to increase at interest."

Going with a more contemporary definition:

u‧su‧ry  /ˈyuʒəri/ Pronunciation Key - Show Spelled Pronunciation[yoo-zhuh-ree] Pronunciation Key - Show IPA Pronunciation

–noun, plural -ries. 1. the lending or practice of lending money at an exorbitant interest.
2. an exorbitant amount or rate of interest, esp. in excess of the legal rate.
3.Obsolete. interest paid for the use of money.

dictionary.reference.com...

Note the third definition.

And the entire global economy depends upon interest, and it started long before the first Pilgrim stepped off the Mayflower.

Ok, so why does'nt the gov/military just tell these loan people that
they don't get the money, and just have the debts payed off like that,
than we would'nt have this problem.

well a lot of what makes military people so vulnerable to this in general is just the really low pay for the lower enlisted. as im sick and cant work my wife and i are trying to live on an E2's pay and its tough, we had a payday loan that we kept floating for 6 months and we paid a LOT of interest but the interest was always easier than paying off the loan for a long time. in many cases E1-E4 AUTOMATICALLY qualify for food stamps. we havnt signed up yet but we're considering it. its a shame really...willing to get killed for 1400 a month. yet i can understand it as i did 12 years in the military before i got sick and married.

but as for the security issue, its always been known that people in financial troubles are more suceptable to treason. hell, its how the CIA recruits operatives in foreign countries. so its no wonder that they'd put a microscope on our own people. i had a LOT of explaining to do about a few bad checks in my younger years when i was being cleard for my security status.

So one could say, in essence, that the credit card companies and payday loan sharks are destroying the security and safety of our nation. THey're being unpatriotic and un-American.

When I was in, I remember there were some soldiers that had serious problems managing their money. I even know one NCO who was kicked out because he had been bouncing checks left and right.

When you leave any military base, you will find barely 50 yards after stepping outside the gates, a huge assortment of shyster and suspect businesses just right there. For example, go right outside Ft Lewis, and youll be amazed at the ridiculous number of pawn shops, payday loan centers, loan shops, ect. People do not realize just how much the armed forces are preyed upon by unsavory people. These scum know that alot of the soldiers are young, fresh out of their parents care, clueless about money and things like that. There are also alot of older soldiers who have been around, but need money for alot of things for their families, and know these guys are pretty desperate.

I remember learning when I was in the army that something like 1/3 of military families are on some form of welfare. Thats very disturbing, folks.

The thing is, I don't think that you will see guys running up debts to get out of deployment. if anything, the opposite would be true. For many soldiers, the extra hazard pay and combat pay plus cost of living they get for deploying is very attractive for helping them financially, and Ive know guys in the past who were struggling with money volunteering to deploy to help ease their financial problems.

I do think, however, that base commanders and the military communities need to really start getting together with the civilian town councils to crack down on these parasites, because these guys know exactly who they are screwing, and that its a sure way to get rich. They make their money of the ignorance, naievite, and immaturity of alot of soldiers.

They are no different than the hundreds of prostitutes that swarm on military bases around the 1st and 15th of every month, knowing thats when the soldiers get their pay.

It's mostly the bloody payday loan places. 300% and up loan rates are pretty normal for these outfits. www.nbc4.com...

dawnstar mentioned they wanted their son to learn about finances and that's an excellent idea. I know going through school and into college that there was never any sort of financial planning or budgeting taught. I tried to follow in my dad's footsteps, but he made far more than I ever have so I can't use the same plan. Luckily, I'm pretty much debt free just a mortgage and one credit card.

It's all about education, and it wouldn't surprise me if the banking industry did it's damnedest to prevent young customers from learning how to stay out of debt.

This no new, back during the first gulf war it was problems with financial situations of many military personnel.

When my husband was deployed to Saudi Arabia I was left OK, but his military pay was held back for three months.

With no communications to tell my husband the problem I was caught up in the bureaucracy.

I had to get in touch with his base unit in California almost everyday while been in Virginia to get things straightened out.

It was a nightmare.

And I was working for Family services too, I was not the only one it was plenty of families that had no money to feed their children while their husbands were gone.

Now is worse, life is very expensive with only a military pay check while many women have to stop working to stay home and take care of the children.

Everything is expensive, our nation is a nation of spenders and credit card abuse.

The problem is the outrageous interest rates that goes with loans that many military families take in order to survive when one person is deployed.

Remember that this affecting more than anything no the active duty but the reservist they are the ones that in many instances have to take a cut on their pay for the military pay the get onces called back.

If my husband was to ever be called back, I would not be able to make it with his reinstated old military pay.

That is the biggest problem with military personnel now.

[edit on 25-10-2006 by marg6043]

Kids should be taught basic personal finance and other life skills starting in 8th grade. Too many of they are woefully unequipped to understand even the basics of a loan.

And these exorbitant interest rates should be against the law, imo.

Originally posted by jsobecky
Kids should be taught basic personal finance and other life skills starting in 8th grade.

Actually they do in schools, my daughter took that class in high school, they give them an imaginary budget and they have to balance it.

Yeah God forbid they send a trooper over there with financial problems. If they steal any money it might start eating into the Corporate and Politicians thievery.
These guys are a laugh-riot. They let people steal billions and they worry about american men and women who for the most part are honest. Companies are charging higher then shylock finance rates and its all they can worry about.

Our leadership is sickening.

That's terrible to hear that there are so many U.S. military men in debt. But that's the way how this society works, unfortunately. It is so easy for you rack up debts left and right, while the value of money is always dropping.

Compared to these soldiers, Dutch marines that go abroad have it real good, because they usually get double their salary, and lots of benefits. My dad used to make half of what his (equally ranked) relocated colleagues made. Because his home base was here in Aruba, and the majority of the (European) Dutch marines were on overseas duty here (three years). In their bases in The Netherlands, they made just as much as my father did. When they were on overseas duty they make somewhere around $3000-$6000 a month, depending on their rank.

Bandid I wish it was like that here, but beside hazardous pay that you get while in war and the none tax during service in the front I don't see anything else to help these families.

Like I say the ones suffering the most are reservist in duty, they are a big group serving in Iraq.

It is not easy to take a pay cut from your regular finances specially if you are living on a budget.

Then loans and credicards take advantage of raising interest rate if you are late on payments for one reason or the other one.

Then the present administration has passed bills to make more difficult to claim bankruptcy and the more rights for lenders to come after your property.

Our government wants to serve two masters and that is hurting military service man and woman, plus the dying middle class American.