Predatory Lending and the Military: the Law and Geography of "Payday" Loans in Military Towns
OHIO STATE LAW JOURNAL VOLUME 66, NUMBER 4,2005 Predatory Lending and the Military: The Law and Geography of "Payday" Loans in Military Towns STEVEN M. GRAVES* AND CHRISTOPHER L. PETERSON** A heated national debate has developed over whether one type of high-cost predatory lender, commonly known as "'paydaylenders, " targetfinancially vulnerable militaryfamilies and whether the law protects them from such predation. Writing within the relatively new interdisciplinary "law and geography" movement, this Article provides geographicevidence thatpayday lenders do aggressively target American military personnel, irrespective of mostforms of legal regulation. This Article first provides a comprehensive introduction to payday lending business practices and to the financial vulnerability of military personnel. Next, this Article presents empiricalresearch gatheredfrom an examination of 20 states, 1516 counties, 13,253 ZIP codes, nearly 15,000payday lenders, and 109 military bases. High concentrations of payday lending businesses in counties, ZIP codes, and neighborhoods in close proximity to military bases werefound Observations were controlled by comparing the density ofpayday lender locations to bank locations. Each of the 20 states studied had a different legal andregulatory strategyfor addressing payday lending. However, the only regulatory strategy which preventedpayday lendersfrom targetingmilitary personnel was the aggressive and consistent enforcement of civil and criminal usury law. Going beyond the debate over predatory lending to militarypersonnel, this researchprovides a realistcheck on pure legal reasoningand unfoundedfaithin currentconsumer protection rules. *Assistant Professor of Geography, California State University, Northridge. The author gratefully acknowledges generous financial assistance from the College of Social and Behavioral Sciences at California State University, Northridge. **Assistant Professor of Law, University of Florida, Frederic G.
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