A 400% Interest Rate? TN Attorney General Says Lenders Prey On Soldiers

In 2011, Attorney General Bob Cooper visited Fort Campbell along with Holly Petraeus, wife of Retired General David Petraeus, to learn more about the financial problems of soldiers. Image: C-SPAN

Tennessee’s Attorney General says predatory lenders are still targeting members of the military, despite a federal law that’s supposed to stop the practice. Bob Cooper travelled to Capitol Hill this week, to testify before the Senate Commerce Committee.

Cooper’s office has experience prosecuting companies that prey on soldiers at Fort Campbell. He pointed to one that sold computers on a rent to own basis. Getting ready to deploy and eager to stay in touch with their families, soldiers would make payments as much as 400 percent over the regular retail price.

“Once soldiers were locked into these abusive financial agreements, they were afraid their consumer dispute would be viewed negatively by their commanders and would harm their advancement so they were hesitant to report or complain,” Cooper told the committee.

A 2006 law forbids active duty service members from taking out payday loans and caps interest rates on other forms of credit. But Cooper says unscrupulous companies have found ways to exploit holes in the law. Cooper says businesses will shutdown in one town, only to set up shop somewhere else.