Very important testimony from a veteran

We snagged a copy of the testimony of Elisabeth Hagens, a military veteran, who points out teh coming unfairness in our system. It looks long in print, but if you heard it live or watched it on television, you would have seen that her clear, calm voice silenced the room. That doesn't happen very often.

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Hello Chair Holvey and members of the committee, for the record my name is Elisabeth Hagens. I am a retired Master Sergeant of the Oregon Air National Guard. I served 20_ years in the US military. I proudly have two sons who have also served, one in the war in Iraq.

I am here to testify in favor of House Bill 2871, which will afford all Oregonians the same protections against predatory lenders that active military families will soon enjoy.

Last year, Congress passed and the president signed, the Military Lending Act, which will prohibit any lenders from charging a military member on active duty or his or her immediate family, more than 36 percent interest. The cap will go into effect in October of this year.

Congress acted when the Department of Defense and consumers groups called for the cap because payday loan shops and car title lenders were clustering around military bases, preying on young soldiers and their immediate families who too often make too little money and are too far from home to count on traditional support systems.

In an analysis of the impact on predatory lending on the military, the Department of Defense presented evidence that clearly showed predatory lending was having a negative impact on national security and military readiness.

The Defense Department estimates one in five active-duty service members is a payday loan borrower and that "predatory payday lending costs military families over $80 million in abusive fees each year." Since September 11, 2001, nationwide more than 51 percent of Army Guard members and 31 percent of Air Guard members have been activated to meet homeland and overseas demands.

Capt. Mark D. Patton, commanding officer at the Point Loma Naval Base in California, testified before Congress that between 2000 and 2005, the number of sailors and Marines who had their security clearances denied or revoked because of financial problems increased by 1,600 percent.

"There is no enemy that our Navy is more passionate about defeating than one who targets our own sailors," he said.

The Department of Defense also made clear that limited, targeted interest rate caps particular loan types will not work, and, in fact, invoked Oregon as an example.

And that is why our active military members will soon be protected from predatory lenders by a comprehensive 36 percent interest rate cap. This is a very good thing.

Unfortunately many military personnel will not be protected by the Military Lending Act. As you are aware, the National Guard and Reserve is made up of citizen soldiers. This means that their main occupations are outside of the military structure. They are warehousemen, construction workers, students, doctors, and professionals of all types. Many self employed. The new law does not apply to retired or military members when they are not on active duty status. They leave good paying jobs to serve their country, and often receive less than they would earn in their regular jobs. They often return to their civilian lives deep in debt and unable to recover financially. Today, with HB 2871, you have the opportunity to extend a level of protection to the men and women of Oregon’s National Guard and Reserve who return from active duty in Iraq and Afghanistan. I urge you to vote yes on HB 2871 and send the message that all Oregonians – including Oregon veterans and our citizen soldiers – deserve access to fair and affordable credit.