Predatory consumer practices under scrutiny

The Federal government is now considering changes to the Military Lending Act to bring it in line with the Truth in Lending Act. This gesture toward expanding consumer protection is as welcome as it is necessary. The existing limitations of the Military Lending Act have meant that service members have been subjected to, for example, loan interest rates exceeding 40 percent or loans automatically “refinanced” by the lender. Such exploitive financial transactions often have involved payday or car title lenders.

Although the proposed updates to the legal regime represent an important first step, the changes do not go nearly far enough to address the full scope of predatory practices by lenders and other financial institutions. As observed previously here, the banksters on Wall Street have escaped the devastating economic collapse they caused largely unscathed. In fact, the banks that were supposedly “too big to fail” appear to be even bigger now. Worse still, it seems that some of the very business practices that led to the Great Recession have continued. The welfare of consumers and the economy of the United States and, indeed, the world should compel the Federal government to take a comprehensive approach to eradicating the predatory practices that still happen all too often now.