Lending to the military | Miami Herald

America’s service men and women are disciplined, honorable, hard-working and dedicated. I have a deep respect for anyone who is willing to sacrifice and put his or her life on the line to protect our great country.

Unfortunately, the Department of Defense recently proposed tightening restrictions on lending to service members. The DoD said that current restrictions in the Military Lending Act — notably targeting tax refund anticipation loans, payday loans and car title loans — leave too many loopholes. Banking trade groups have warned that the DoD’s approach could increase costs and limit choices.

This proposal would extend the terms of the MLA to all types of credit that’s subject to the Truth in Lending Act, with particular implications for credit cards, lines of credit, installment loans and deposit advances offered to service members. It wouldn’t cover home mortgages or money purchase loans for cars, but would potentially impact the ability of our service members to access credit.

The proposal allows creditors to exclude “bona fide fees that are reasonable and customary” from the MLA’s 36 percent APR cap. I’ve always recommended that troops work with an FDIC bank where they will receive market rates much lower than that 36 percent cap. In fact, I’ve raised this issue with federal regulators that they should do a better job of providing financial literacy to our troops.

Not just on Veterans Day, but throughout the year, Florida banks and the FBA are proud to support the financial needs of the men and women who serve, or have served, our country.