"Don't take me half the way."

 Crystal Gayle

 The Department of Defense just made a big surge but needs to finish the job.

 I'm not talking about the war in Iraq; I am talking about the war against financial companies that prey on military personnel and their families.   

 I heard that the Department of Defense was issuing a proposed rule titled, "Limitations on Terms of Consumer Credit Extended to Service Members and Dependants."

 My first reaction was jubilation.

 I've written many columns about financial companies taking advantage of military personnel.  I thought the solution had finally come.

 Then I read the proposed proposal  issued in  the April 11^th Federal Register.

 I am not going to hang a sign that reads, "Mission Accomplished."

 The proposal does some good things. It limits payday lenders, vehicle title lenders and refund anticipation lenders to "only" 36% interest.

 Believe it or not, 36% is a huge improvement. Payday lenders claim they can't make it on such paltry amounts. Steven Schlein, spokesperson for a payday industry trade group, said that after these regulations become effective, "there won't be any payday loans to military people."

 We ought to make that day a national holiday. 

 I would celebrate but I know it is a wasted effort.

 It won't be hard since the Department of Defense proposal is filled with loopholes.

 The rules don't apply to rent- to-own companies or banks that charge fees for high-interest credit cards. The combination of fees and interest could easily push a soldier's credit card rate above 36%.

 If a government ban does not cover all the loopholes, it is useless. I learned that lesson the hard way.

 I've spent almost all of my working life setting up structured settlements. Structured settlements are designed to keep injury victims from running through their money. 

 In the 1990's, some smart people figured out how to buy the structured settlement payments from injured people and make huge profits. Several of us lobbied state and federal legislatures, pushing for laws that would keep settlement purchasers under control.

 Kentucky was the first state with model legislation, and it passed unanimously. Almost every state and eventually, the federal government, put laws on the books, but all left some loopholes. 

 We could have made a proposal that completely put the purchasers out of business. We  didn't. They decreased activity for a couple of years, but now they are back,  stronger than ever.

 A  bunch of new players got into purchasing structured settlements, including a corporation  that offers structured settlements to injured people. They set up structured settlements and then send the injured people letters asking if they want to sell them back.

 The settlement purchasers  figured out the loopholes--just like the payday lenders will do for military personnel  and their families.

 Instead of a 14-page proposal on the Federal Register, I could amend the  Defense Department proposal to three simple points.

 
1.      No financial institution may charge a military person or their families a predatory interest rate or fee.

       2.      If a financial institution is found guilty of charging a predatory interest rate, the corporation will be immediately dissolved, and the assets (including all personal assets belonging its officers and directors) shall be forfeited to the U.S. Treasury.

       3.      If this act occurs during a time of war, the company officers and directors will be conscripted into the armed services and serve in the war zone for the duration of battle.

 I don't think the Department of Defense proposal will keep military personnel from being ripped off.

 I know my proposal will.

 The Department of Defense has the perfect opportunity to do something to help soldiers.  We are in a long and protracted war, and almost everyone in the country wants to help the soldiers fighting it.

 There is overwhelming public sentiment to ban predatory lenders to soldiers, and the Department of Defense has a chance to completely stop  it once and for all.

 This is an issue where we need to say mission accomplished.  It is not a time to go half the way.

 Don McNay is Chairman of McNay Settlement Group.  You can write to him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or read other things he has written at www.donmcnay.com.  His award-winning column is syndicated on the CNHI News Service, and he is on the Board of Directors for the National Society of Newspaper Columnists.