My Military Space
Quick cash a way to financial
by Tech. Sgt. Steven Wilson
28th Bomb Wing Public Affairs
10/26/2006 - ELLSWORTH AFB, S.D. -- It's
close to pay-day and the bills are piling up. Creditors are
bugging an Airman at work. He can't concentrate on his job
because every time the phone rings he cringes, hoping it's not a
collection agent. At night he can't sleep. He simply tosses and
turns worrying, "What if my unit finds out I can't pay my
There's no escape. Bill collectors are burning up the phone
line, demanding he pay a bill and he knows that, at least in
this moment, it's simply impossible. After all, he has to eat;
he has a family to take care of.
The next morning, he hears a jingle on the radio for a pay day
loan company. They promise a quick fix, sure-fire solution to
all his problems ... they'll hold his check until pay day.
The best thing for this Airman to do is stop and do a function
check before he actually pulls the trigger on something that
might worsen his problem.
Pay day loans have the attention of leadership at all levels.
The Under Secretary of Defense (Personnel and Readiness), The
Honorable David S.C. Chu, testified before Congress Sept. 14,
2006 concerning "lending practices that prey on servicemembers
and their families."
He said a study on these practices partially sought to decrease
the prevalence of predatory financial practices that seek to
deceive servicemembers or take advantage of them at a moment of
The report Mr. Chu delivered to the Nation's lawmakers noted
predatory lending companies actively target military personnel.
Another common tactic by predatory lenders mentioned in the
report was seeking out young and financially inexperienced
borrowers who have bank accounts and steady jobs, but also have
little in savings, flawed credit or have hit their credit
The types of lenders provide loans based on the borrower's
assets and not necessarily on the ability of the borrower to
actually repay the loan.
Instead, Mr. Chu's report added, the predatory business will
take advantage of the servicemembers inability to pay the loan
in full when due and encourage extensions through refinancing
and loan flipping. These refinances often include additional
high fees and little or no payment of principal.
Mr. Chu reported to the body of lawmakers some chilling accounts
of military members being pounced on by predatory lenders.
In one example, he noted a Senior Airman behind in car and rent
payments. She went to a payday loan company and took out a $500
loan with an agreement to pay back $600 in two weeks. When she
couldn't repay the original $500, she took out other payday
loans and had to do multiple rollovers on each one. To pay off
these loans she contacted an installment loan company who
provided her with a $10,000 loan at a 50 percent annual
percentage rate. The total cost to pay off the payday loans was
$12,750. She still owed the installment loan company $15,000.
That's an awful long way from the original $500 problem.
It got worse.
"Her financial problems were a contributing factor to her
pending divorce," the report concluded.
Ellsworth's command chief, Chief Master Sgt. John Gillette,
offered his own perspective on predatory lenders.
Chief Gillette said as he and his family were coming through the
enlisted ranks, they made a conscious effort to live within
their means without accumulating credit card debt and big car
"Our motivation was simple," he said. "We did not want to be a
slave to the material world.
(Pay day loan businesses) feed off our society that desires
instant satisfaction," the chief said. "I would ask our Airmen
who are tempted to patronize these businesses to look at the
entire bill they will pay when they take out that loan."
Ellsworth and the Air Force has many other sources specifically
geared for servicemembers and their families in a time of need,
Master Sgt. Jon Vance, 28th Aircraft Maintenance Squadron first
"Everyone gets in a tight spot at some point," he said. "The
first sergeant is the key to the helping resources available."
Sergeant Vance explained there are never career implications in
asking for help and sometimes potential problems are best
avoided before things spiral out of control.
"The Airman and Family Readiness Center (formerly Family Support
Center) offers financial counseling for troops and their
families if they need it," said Maj. Melanie Stewart, 28th
Mission Support Squadron commander.
Sergeant Vance also touched on other programs available to
"Air Force Aid can help with everything from money to help with
car repairs to bills, under special circumstances," he said.
He said the Diamond Mart, run by the first sergeants, can help
with food, toys for the kids, uniforms, etc.
Operation Warmheart can help members financially and this is
also administered by the shirts, he added.
"The key to unlock all these resources is to think of your
family," Sergeant Vance said. "You wouldn't hesitate to ask your
mom or dad for help, would you? We're here and ready to take
care of our own; just get with your supervisors and the shirt."
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