August 24, 2014

ProPublica highlights predatory lending

July 28, 2014 – The investigatory journalism outfit ProPublica highlighted abuses by USA Discounters, a company accused of subverting a loophole in the Servicemembers Civil Relief Act in order to take advantage of servicemembers through predatory lending practices and lawsuits.

According to the investigation, USA Discounters targets servicemembers through military newspapers and magazines, and files lawsuits if borrowers fall behind in payments. The servicemembers targeted are stationed all around the world, and usually cannot afford to attend a court date near Virginia Beach, where the company is located.

SCRA was designed to help servicemembers defend themselves against lawsuits, but does not address instances where plaintiffs may file suit. ProPublica wrote that the company had filed more than 13,470 lawsuits, and seizes the pay of more active-duty military members than any other company.

Attendees at NAFCU's Annual Conference and Solutions Expo in Las Vegas last week heard from CFPB Office of Servicemember Affairs Assistant Director Holly Petraeus about financial counseling for military members and how defense credit unions are able to prevent such abuses from taking place.