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http://www.military.com/daily-news/2013/06/28/firms-paying-back-... Those who are active duty or have been since 2010, DOD is investigating "hidden" charges by lenders when you pay by military allotment. Those who used US Bank and its affiliates will get $100 on average from the case just wrapped up. There is a list of other lenders to be investigated.

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Oh man, US Bank ripping off people in the military... I imagine worse press for a company is possible, it's just not likely.

US Bank should just sell out now. I hear nothing but crappy things about them.p

Actually, the Olympic promo they did with their credit card (totaling 33k points) last yr was great. I got $800 value from those points. Thanks us bank, you greedy scum!

Their Club Carlson card is pretty sweet too. However, they fail in every category related to banking.

nsdp said:   http://www.military.com/daily-news/2013/06/28/firms-paying-back-... Those who are active duty or have been since 2010, DOD is investigating "hidden" charges by lenders when you pay by military allotment. Those who used US Bank and its affiliates will get $100 on average from the case just wrapped up. There is a list of other lenders to be investigated.

On topic: One of the dumber financial moves I've made in my life was to buy a new car when I was 19. The guy who sold it to me was supposedly a retired 1SG and said he would get me guaranteed great rate since I was on active duty. I was naive and awestruck at the thought of a new car, with less than 50 miles since I had never owned or driven anything with less than 100k. The dude "helped" me pay slightly above MSRP and got me the amazing rate of 17.9% with a company called SNAAC. He of course just focused on how the payments were only $250 a month or so and how appealing that was.. but a few months after I realized how stupid I had been and started mastering my credit. Soon after I got a refi and vowed to never be duped or be naive when it came to my money again!

BradisBrad said:   nsdp said:   http://www.military.com/daily-news/2013/06/28/firms-paying-back-... Those who are active duty or have been since 2010, DOD is investigating "hidden" charges by lenders when you pay by military allotment. Those who used US Bank and its affiliates will get $100 on average from the case just wrapped up. There is a list of other lenders to be investigated.

On topic: One of the dumber financial moves I've made in my life was to buy a new car when I was 19. The guy who sold it to me was supposedly a retired 1SG and said he would get me guaranteed great rate since I was on active duty. I was naive and awestruck at the thought of a new car, with less than 50 miles since I had never owned or driven anything with less than 100k. The dude "helped" me pay slightly above MSRP and got me the amazing rate of 17.9% with a company called SNAAC. He of course just focused on how the payments were only $250 a month or so and how appealing that was.. but a few months after I realized how stupid I had been and started mastering my credit. Soon after I got a refi and vowed to never be duped or be naive when it came to my money again!


Yeah, you had a loan through my former employer. That was a mistake...but let me ask you, were you an Army E1 with 0 FICO? If so, you were that bad of a credit risk.

I'm very familiar with the company in the link, couldn't happen to nicer guys. That being said, there is a major risk here that had a lot of people losing sleep at night when I left military auto lending that the CFPB was going to come in and make examples of companies who charge military members subprime interest rates.

The problem is that more often than not, people who get 17.99%+ interest loans are that bad of a credit risk! When you have charge offs for certain branch/rank combinations of the military that are >10% per year and you have all the normal corporate expenses, 17-20% is exceptionally reasonable.

mwa423 said:   BradisBrad said:   nsdp said:   http://www.military.com/daily-news/2013/06/28/firms-paying-back-... Those who are active duty or have been since 2010, DOD is investigating "hidden" charges by lenders when you pay by military allotment. Those who used US Bank and its affiliates will get $100 on average from the case just wrapped up. There is a list of other lenders to be investigated.

On topic: One of the dumber financial moves I've made in my life was to buy a new car when I was 19. The guy who sold it to me was supposedly a retired 1SG and said he would get me guaranteed great rate since I was on active duty. I was naive and awestruck at the thought of a new car, with less than 50 miles since I had never owned or driven anything with less than 100k. The dude "helped" me pay slightly above MSRP and got me the amazing rate of 17.9% with a company called SNAAC. He of course just focused on how the payments were only $250 a month or so and how appealing that was.. but a few months after I realized how stupid I had been and started mastering my credit. Soon after I got a refi and vowed to never be duped or be naive when it came to my money again!


Yeah, you had a loan through my former employer. That was a mistake...but let me ask you, were you an Army E1 with 0 FICO? If so, you were that bad of a credit risk.

I'm very familiar with the company in the link, couldn't happen to nicer guys. That being said, there is a major risk here that had a lot of people losing sleep at night when I left military auto lending that the CFPB was going to come in and make examples of companies who charge military members subprime interest rates.

The problem is that more often than not, people who get 17.99%+ interest loans are that bad of a credit risk! When you have charge offs for certain branch/rank combinations of the military that are >10% per year and you have all the normal corporate expenses, 17-20% is exceptionally reasonable.

But this dealt with what's essentially payments via automatic paycheck withholdings - it'd seem that the only real risk would be the borrower bailing on his post so that he stops getting paid altogether, right? And the punishment was due to undisclosed fees and whatnot related to those automatic payment plans, not the actual interest rate being charged.

mwa423 said:   BradisBrad said:   nsdp said:   http://www.military.com/daily-news/2013/06/28/firms-paying-back-... Those who are active duty or have been since 2010, DOD is investigating "hidden" charges by lenders when you pay by military allotment. Those who used US Bank and its affiliates will get $100 on average from the case just wrapped up. There is a list of other lenders to be investigated.

On topic: One of the dumber financial moves I've made in my life was to buy a new car when I was 19. The guy who sold it to me was supposedly a retired 1SG and said he would get me guaranteed great rate since I was on active duty. I was naive and awestruck at the thought of a new car, with less than 50 miles since I had never owned or driven anything with less than 100k. The dude "helped" me pay slightly above MSRP and got me the amazing rate of 17.9% with a company called SNAAC. He of course just focused on how the payments were only $250 a month or so and how appealing that was.. but a few months after I realized how stupid I had been and started mastering my credit. Soon after I got a refi and vowed to never be duped or be naive when it came to my money again!


Yeah, you had a loan through my former employer. That was a mistake...but let me ask you, were you an Army E1 with 0 FICO? If so, you were that bad of a credit risk.

I'm very familiar with the company in the link, couldn't happen to nicer guys. That being said, there is a major risk here that had a lot of people losing sleep at night when I left military auto lending that the CFPB was going to come in and make examples of companies who charge military members subprime interest rates.

The problem is that more often than not, people who get 17.99%+ interest loans are that bad of a credit risk! When you have charge offs for certain branch/rank combinations of the military that are >10% per year and you have all the normal corporate expenses, 17-20% is exceptionally reasonable.


You're close.. an air force E3 with a few CC's with maybe 2 year's history and no balances. I was an unknown credit risk, for sure, but I was able to refi the loan just 6 months later for fairly close to the same amount with an local credit union at 8%, and again 6 months later to 4%.. so I can't imagine I was THAT terrible of a credit risk? I think, in hindsight, that I was most frustrated with the way it was spun to me. As a "great deal" and one that I shouldn't pass up under any circumstances.

All in all, it was a not-so-free lesson that I have since learned quite a bit from. Both about myself and about my money.

Brad, as former board member of a credit union with lots of military members, you didn't deserve to be treated as a bad credit risk. That was a bill of goods sold to you at the time by the seller/lender. There were ways to work within the military system to take care of problems. Did it all the time for Security Service FCU and Randoph-Brooks. Jerks who stayed outside the system couldn't afford to have someone looking over their shoulder into how they had screwed the EM in the first place. Certain San Antonio auto dealers come to mind,I was a battery commander for a bunch of bottom quintile draftees who were paid $149/mo plus hazardous duty pay. So I got to deal with complaints from whining creditors stateside who had gouged my kids with bad deals and usurious interest rates. Fortunately the 108thFAG was deployed from Ft Hood to SE Asia, so I could use the Texas usury laws to negotiate better terms or screw the creditor completely under the Texas Usury laws. Some times I had to change a HOR to make it stick. Arkansas was even better.

The worst of the bunch of whiners never served or inconvenienced themselves in any way to help service men. Just like an attorney I know who did foreclosures on personnel deployed to Iraq or Afghanistan. He was a big time draft dodger in college. Imagine doing a foreclosure on a pregnant wife while hubby is deployed to Iraq. This has been a repeat problem since WWI. I just wish some AUSA would prosecute some bank and its attorney for mail fraud when they file the phony certificate with the foreclosure that the old Soldiers and Sailors Relief Act of 1940 or is replacement doesn't apply. The REMF's just don't care if the law gets in the way of their deal.

mwa423, I hope the whole lot rots in federal prison. DOJ can always get them either under mail or wire fraud. I only faced one tour so the kids today pay a far higher price than we did and we paid too much.

Brad - Air Force E3 with some credit history? Yeah, you were actually a pretty good credit risk. That being said, one of the big things I walked away from that job realizing was that *all* car dealers are criminals (at least morally, if not legally). Seeing an E5 with a 705 FICO get a 16.99% interest loan was enough for me to actually call a buddy who works at a credit union and offer him a free lead. Car dealers regularly ask for up to 130% of retail book (which, as most FWF people will agree) is overpriced already and they take *every penny* of that 130%. Was it wrong for the dealership to charge you MSRP? Well, if you owned a dealership, you would probably negotiate to sell the car at a higher price too. It's an interesting moral quandary.

nsdp - Eh, I'm not sure exactly what you're saying, but there are a lot of rank/branch combinations who are god awful credit risks. While, in your experience, you brokered settlements with lenders, there are some bases where troops are basically told by the base command that their creditors can eff off. Some bases you can call a commanding officer and get a payment from the solider that hour. Others, the C/O will tell the collections staff right where they can stick it. Remember, your experience is from a C/O perspective at a couple bases and a bit old. I left that job a couple months ago and had a good idea of how every base in the country treated debts.

Fundamentally, as you pointed out, the bottom quartile of service members are guys who left home at 18, may or may not have finished high school, may or may not have ever heard of the concept of interest and their E1 paycheck is the most money they have ever had in their lives. At that point, they figure $500 for a cool looking Mustang is a bargain and can't wait to get behind the wheel and speed off into the sunset only to discover how bad of a hole they have dug themselves into a year later.

Here's the problem: Does a car dealer or lender have a legal or ethical obligation to stop them in their tracks, sit the guy down and tell them "gee son, you really shouldn't get into this car at these terms. You should get yourself into this crown vic for $1,500 and save some money". The follow up problem is if, at that point, the guy wouldn't just walk out the door and go down the street to a different dealer (costing the responsible dealer the sale) to a guy who is more than happy to load the guy up at the state usury max in a 120k mile vehicle at 130% LTV.

You mention that you were with Security Service; they aren't saints either. I've gotten copies of their contracts from dealerships that had terms that made SNAAC seem like downright saints. 66 months on a car with 130k miles at 16%? I suppose your former employer should be headed to federal prison too. Will you be joining them?

Ending my rant here, there's a simple issue when it comes to military auto lending: What is a fair profit to make off of service members and what expectations are reasonable for repayment of contracts? Especially given that MANY military members are HORRIBLE credit risks.

You seem like the type of person who would be exceptionally conservative and be the first guy to forgive loans to service members made by the NSDP Federal Credit Union (if it existed). I wish it were that easy and it would be nice if my former employer could have done that as well. However, they have to repay the capital they lend, cover losses and make a profit sufficient to keep them at their jobs. The question that kept me up at nights was how could there be a mutually beneficial military program where lenders could get business from borrowers who understood the terms and thus were better credit risks and thereby offering better terms. I found an answer while I lived in that world....

Glitch99 said:   mwa423 said:   BradisBrad said:   nsdp said:   http://www.military.com/daily-news/2013/06/28/firms-paying-back-... Those who are active duty or have been since 2010, DOD is investigating "hidden" charges by lenders when you pay by military allotment. Those who used US Bank and its affiliates will get $100 on average from the case just wrapped up. There is a list of other lenders to be investigated.

On topic: One of the dumber financial moves I've made in my life was to buy a new car when I was 19. The guy who sold it to me was supposedly a retired 1SG and said he would get me guaranteed great rate since I was on active duty. I was naive and awestruck at the thought of a new car, with less than 50 miles since I had never owned or driven anything with less than 100k. The dude "helped" me pay slightly above MSRP and got me the amazing rate of 17.9% with a company called SNAAC. He of course just focused on how the payments were only $250 a month or so and how appealing that was.. but a few months after I realized how stupid I had been and started mastering my credit. Soon after I got a refi and vowed to never be duped or be naive when it came to my money again!


Yeah, you had a loan through my former employer. That was a mistake...but let me ask you, were you an Army E1 with 0 FICO? If so, you were that bad of a credit risk.

I'm very familiar with the company in the link, couldn't happen to nicer guys. That being said, there is a major risk here that had a lot of people losing sleep at night when I left military auto lending that the CFPB was going to come in and make examples of companies who charge military members subprime interest rates.

The problem is that more often than not, people who get 17.99%+ interest loans are that bad of a credit risk! When you have charge offs for certain branch/rank combinations of the military that are >10% per year and you have all the normal corporate expenses, 17-20% is exceptionally reasonable.

But this dealt with what's essentially payments via automatic paycheck withholdings - it'd seem that the only real risk would be the borrower bailing on his post so that he stops getting paid altogether, right? And the punishment was due to undisclosed fees and whatnot related to those automatic payment plans, not the actual interest rate being charged.


I realized I missed your post. While an allotment is just basically just an automatic check withholding, a member of the military can stop an allotment any time he wants. What was equally or more common was a somebody giving his significant other their mypay password and their significant other decide the $x00 a month would be better spent elsewhere than on their car. What this particular company (and my former employer) did was that their terms only allowed people to pay by allotment and then they charged a fee for doing so. A civilian scenario would be if AT&T only took credit card payments but charged a $2.00 convenience fee for paying by credit card. Ticketmaster has done this for years, people aren't pleased by it, but it's in the terms. I'm not making a statement on whether this is legal/moral/ethical/etc. but just explaining what actually is going on.



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