“Given the many sacrifices military families make, it is deeply disturbing that predatory lenders would target them with exploitive financial schemes,” Sen. Mazie HironoMazie Keiko HironoHillicon Valley: Washington preps for Mueller report | Barr to hold Thursday presser | Lawmakers dive into AI ethics | FCC chair moves to block China Mobile | Dem bill targets 'digital divide' | Microsoft denies request for facial recognition tech Dems introduce bill to tackle 'digital divide' Overnight Energy: Collins receives more donations from Texas oil, gas industry than from Maine residents | Interior chief left meetings off schedule | Omar controversy jeopardizes Ocasio-Cortez trip to coal mine MORE (D-Hawaii) said Wednesday. “I’m proud to join with my colleagues in urging the Department of Defense to tighten up financial protections for military families and close loopholes that leave service members vulnerable to these predatory practices.”

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The senators said payday lenders “cluster” around military bases and target advertising toward service members. 

The Department of Defense has the authority to write rules to protect service members from certain predatory loans, but the senators said the DOD failed to include high-interest products, such as overdraft loans, installment loans, nontraditional payday loans and nontraditional car title loans in its definition of “consumer credit.”

“Due to the narrow definition of consumer credit, certain lenders are offering predatory loan products to service members at exorbitant triple digit effective interest rates and loan products that do not include the additional protections envisioned by the law,” the letter stated. “Service members and their families deserve the strongest possible protections and swift action to ensure that all forms of credit offered to members of our armed forces are safe and sound.”

Currently, loans that fall under the definition of consumer credit are capped at an interest rate of 36 percent. The DOD is considering rule changes to its consumer credit protection program. The lawmakers said that if the DOD expanded its definition of consumer credit to apply to more types of loans, then rates for service members would not exceed the 36 percent mark.

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