My Military Space
The battle for your buck -- Easy
money often lures Airmen down road to financial nightmares
by Janet Taylor-Birkey
27th Fighter Wing Public Affairs
6/2/2006 - CANNON AIR FORCE
BASE, N.M. -- Editor’s note: This is the first of a
three-part series about Airmen and their money)
Signing on the dotted line can take on a new significance when
“Sign here” is at the end of a payday cash loan application.
Charles Brown, a former Airman, who recently separated from the
Air Force, likened doing business with payday loan stores to
driving down a street in Las Vegas with neon lights flashing
“That’s the way it looks,” he said. However reality is
different. “You go in there, get all the paperwork done, cut
your finger and swipe blood across it, because you’ve just sold
Mr. Brown’s perspective comes from personal experience with the
payday loan industry.
Mr. Brown’s spiral into debt began when he came into the
military after being out of work for almost a year. Bills
followed him and while the process was slow, he was able to pay
them. “Things were going along pretty good but there was an
unexpected death in my family.” He borrowed money from Air Force
Aid to help with his own transportation, but needs arose in his
extended family with which he felt compelled to help.
Upon returning home, Mr. Brown was then unable to take care of
financial needs for his immediate family, prompting him to go to
payday loan stores in Clovis. This way of life became a vicious
cycle of borrowing money and paying it off.
“Once we got everything taken care of and paid off, things would
be fine and something would happen and there would not be enough
money to cover something, so we’d do it again. It’s just a
repetitive cycle that seems to never end.” he said.
Various family health problems required Airman Brown and his
wife to make long trips home, driving them further into debt
with each trip. He said the loans he had taken out became “one
on top of the other; it just got to the point where there were
too many [loans].” Airmen do not realize that compounding the
loans intensifies the problems after a temporary relief, he
Even though Mr. Brown made payments on time, the stores would
call his home the day the payment was due offering to raise the
amount of the loan. He said the companies he dealt with would
offer him the incentive of a bigger loan for referring others to
become customers adding the company would do “anything they can
do to get more people in.”
Airmen used to ask Mr. Brown about going to payday loan stores
after hearing that he has done business with them. “I tell them,
‘If I had it to do over again, I wouldn’t,’” he said.
“The only difference between these places [payday loan stores]
and … loan sharks is you don’t have somebody trying to break
your legs. There were times I wished somebody would come to my
house and break my legs,” said Airman Brown.
Mr. Brown is slowly working his way through paying off the debts
he acquired during the past four years in doing business with
payday loan stores during his time at Cannon. While taking
responsibility for the debt he has acquired, that does not make
the repayment process any easier.
Nor does his earnestness in paying down the debt give him
something to look forward to on payday. “Everybody says, hey
Friday’s payday. I say yeah, it’s payday and I go to town [to
repay the loan]. I spend my whole check before I realize I’ve
even gotten it. Where’s the reward in that?”
The payday loan industry makes its profit by extending
easy-to-get loans to those who usually have little or no credit.
Borrowers sign contracts to repay the principle with interest in
The amount of interest charged is what causes watchdog and other
consumer groups, along with the Department of Defense (http://www.gao.gov/new.items/d05349.pdf)
to call the payday loan industry such names as “predators” due
to what they consider to be unsavory practices and
unconscionable interest rates.
For borrowers in New Mexico, which has no cap in interest rates
governing the payday loan industry, it is plausible to pay “more
than a thousand dollars on a loan of as little as $300, equal to
a 500 percent annual interest rate,” according to the New
Mexico’s Attorney General’s Web site at http://www.
Borrowers rarely experience a change in their financial
situation in two weeks, which means they usually do not have the
money to pay the loan in full when it comes due. “Anyone who
borrows $485 does not have $572 in 14 days to pay it back,” said
Chief Master Sergeant Gary Ashmore, former 27th Equipment
Maintenance Squadron first sergeant.
At this point, the transaction begins to repeat, causing the
borrower to become further entrenched in the fiscal debt spiral.
This is because borrowers are given the option to pay the entire
amount due, or only pay the interest and return in another 14
days to refinance the loan.
National debate has risen concerning whether the payday loan
industry targets military personnel, but former Joint Chiefs of
Staff Admiral J.L. Johnson said there is “no question that
military families are among the ‘targeted group.’”
“A preponderance of payday lenders and cash advance offices are
located in the immediate vicinity of our military bases,” said
Admiral. Johnson, according to http://www.consumers union.org
website, confirming the allegations of those lobbying for
tighter regulations for the payday loan industry.
Master Sgt. Keith Adams, 27th Component Maintenance Squadron
Egress Non-Commissioned Officer, describes Airmen doing business
with payday loan and other quick cash stores as a “pandemic that
is really preying on the younger troops and is causing pain and
headaches to them, as well as to sergeants and commanders.”
“Despite their advertising, their intentions are always the
bottom dollar. With military folks, they’ve got a guaranteed
paycheck, they will get paid,” said Sergeant. Adams.
“These places know the first and the fifteenth that you are
going to be getting a check and if something comes up that you
don’t come by or you don’t drop your payment, or you’re not
there to make it, they know who to call,” said Mr. Brown. He
also said that these businesses will call the shop or talk to
the first sergeant, which can make an Airman’s situation worse
if supervisors are not aware that a troop is having financial
Phone calls have come to his work, and his home. “They make it
seem like if you will come down they will work things out, but
it only serves their purpose to cause you to owe them more
money,” said Mr. Brown.
A review of a Clovis/Portales phone book yellow pages show
payday, title and quick cash loans companies in the Cannon area
outnumber banks almost two to one.
Payday loans appear to affect Airmen on a national level, but
Chief Ashmore tries to quash an Airman’s temptation to do
business with the payday loan industry by keeping copies of
payday loan stores and their rates on a bulletin board for all
his Airmen to see. He also uses every opportunity to speak out
against the potential harm for Airmen.
“Whenever I get the chance to brief people in any form, I try to
make sure they know these people are not their friends, they are
in the business to make money. This is one of my pet peeves, one
of my pet projects, to keep people away from predators of this
nature,” said Chief Ashmore.
“[The payday loan stores] are not doing them any favors, are not
helping them to establish credit and are not out for anyone’s
benefit but their own,” said Chief Ashmore. “[Loans] should not
cost 600 percent interest.”
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