The short term loan industry has seen many changes lately as multiple states have taken rules and regulations concerning the short term lending
options to court. This is a valid and often beneficial way for some who need quick cash to cover an unexpected expense until their next paycheck arrives. However, lawmakers want to alter some of the rules.
In North Carolina, a bill has been proposed that would increase interest rates on such loans, The Daily News reported. According to the source, members of the armed forces are not happy about the proposed changes suggested by House Bill 810. The bill would be an amendment to Consumer Finance Act and would allow lenders to dole out $15,000 loans with up to 36 percent interest. However, in Section 8, Part 1 of the bill, any member of the military trying to obtain a short-term loan would have to obtain written authorization from his or her commanding officer. Marine Brigadier General T.A. Gorry wrote to the legislature explaining that this is unfair and would add to the stress experienced by armed forces members, The Daily News said. Gorry wrote that including that section in the bill could result in an "adverse affect on security clearance, distraction from military duties, an increased stress; particularly during periods of separation." Though the bill was originally proposed in 2011, opposition halted the potential law's progress. According to The Daily News, it is currently pending in the state Senate and may be reconsidered when the 2012 short session begins again on May 16. The Federal Trade Commission suggested people who need to take advantage of short term loans should try to find the lender with the lowest amount of interest, something that the lending community may be interested to know. The group also noted that military personnel often have protections against large fees and interest rates, which has come into play in North Carolina. For now, where short-term loans are concerned, the members of the armed forces must only obey the Military Lending Act, passed by Congress in 2006. Military OneSource reported the law halts interest rates for the military, their spouses and all dependents at 36 percent. Additionally, no collateral in the form of a check, car title or bank account access needs to be provided by the borrower.