Payday Lenders and the Military
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Payday Lenders and the Military

San Diego, CA -  The 2005 Washington State Legislature amended, the Act Relating to Check Cashers and Sellers, otherwise known as payday lenders and it became effective July 24, 2005. The changes specifically address making loans to military borrowers. A letter from the Department of Financial Institutions, Division of Consumer Services alerted all licensed check cashers and sellers with general information about this new amendment. It basically limits their collection activity while a service member is deployed.

A military borrower is defined as, "an active duty member of the armed forces of the United States or any member of the national guard or the reserves of the armed forcesof the United States who has been called to active duty." Pursuant to the amendment:
"(1) A licensee shall: (a) When collecting any delinquent small loan, not garnish any wages or salary paid for service in the armed forces;
(b) Defer for the duration of the posting all collection activity against a military borrower who has been deployed to a combat or combat support posting for the duration of the posting;
(c) Not contact the military chain of command of a military borrower in an effort to collect a delinquent small loan;
(d) Honor the terms of any repayment agreement between the licensee and any military borrower, including any repayment agreement negotiated through military counselors or third party credit counselors; and
(e) Not make a loan from a specific location to a person that the licensee knows is a military borrower when the military borrower's commander has notified the licensee in writing that the specific location is designated off-limits to military personnel under their command."

Importantly, these rules only come into play if a service member enters into an agreement with a payday lender in Washington.
This is a positive development, however for all members of the military who finds themselves caught between the proverbial rock and a hard place, there is a responsible alternative. Below is a press release about Pioneer Services "Help Loans" for service members. It is a welcome alternative to payday lending, which often targets and traps members of the military, and an example of Pioneer Services commitment to providing financial independence for military families.  To ensure that service members are receiving the best financial education possible, ALL Pioneer Services field personnel must be ICFE Certified Credit Report Reviewers. Additionally many of their personnel are also ICFE Certified Identity Theft Prevention Specialists and some have attained Accredited Financial Counselor (AFC) status with the AFCPE (  Pioneer Services has also initiated a curriculum called "Break the Debt Cycle" and they are partnering with Park University to provide on-line training and certification for service members.  For more information about Help Loans, contact your local Pioneer Services Representative.

Full text of Pioneer Services Help Loans Press Release:
Pioneer Services 'Help Loan' a Responsible Alternative to Payday Loans
KANSAS CITY, MO - In order to offer an alternative to payday loans, Pioneer Services created the "Help Loan" in 2003. This short-term installment loan is a one-time loan of $500 with only $25.24 in interest and fees, payable in four monthly installments with a 30-day grace period until the first payment. It offers a disciplined and financially responsible way for service members to get money for unforeseen expenses and comes with the standard Pioneer Services 15 day no-cost satisfaction guarantee.
"The Help Loan was created to give service members an alternative to payday loans that is fiscally sound, affordable, and can't be rolled over," said Pat McCarty, Executive Vice President for Military Relations "It's a terrific way for military families to obtain emergency funds without getting caught in a never-ending cycle of debt, something that happens frequently with payday loans, check cashing services and title loans."

The Help Loan has been available for two years and is one of the many Pioneer Services available to help service members meet their cash needs and keep their focus on their jobs rather than worrying about financial issues. Recent studies have also suggested that predatory and questionable lending Practices target the military community, putting service members in financial harm's way.

One such study, Predatory Lending and the Military: The Law and Geography of "Payday" Loans in Military Towns, conducted by a pair of university professors, claims there is "irrefutable geographic evidence" that payday lenders actively and aggressively target military personnel.

"Because predatory lending Practices have become a huge issue for military families, we are proactively marketing the Help Loan as a better alternative," said McCarty.  For more information about Pioneer Services visit their Web site. For more information about how to protect against predatory lending and to read the study, go to


About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the ( web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: and  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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