Sunday, April 15, 2007

Defense Dept. does not protect soldiers from payday lenders

Restricting Payday loans and fighting financial rip offs of soldiers are passions of mine. I'm enclosing my column for this week that covers both subjects and links to some previous columns.

I noticed on Wednesday that an article I wrote in December about Kentucky Gubernatorial candidate, Steve Beshear went from zero hits on my website to 400 in an hour. Payday loans have become an issue in the Kentucky Governor's race. I am enclosing links to both of those topics.

Have a good week. Please listen to the Joe Elliott show on Monday. I was postponed when Kentucky hired a new men's basketball coach. If they hire a woman's coach on Monday, I may be postponed again but eventually I will make it on during a slow basketball night. I do understand my place in the Kentucky universe and it is not ahead of basketball.

Also, come see me at the Bluegrass Festival of Books. The link for more information is one the left. My nephew, Nick McNay, will be with me. He does not have a book to sign but many say he has more charm and better looks than his uncle.

I am hoping to do an article about the Fit Guys group soon. We lost one of our key members, David Grandgeorge, who is now pastor of a church in Guyton, Ga.


Don McNay

Defense Department Proposal Does Not Protect Soldiers

"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 11th Federal Register.

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

Predatory lenders will be back. Financial service companies have high-powered lawyers and lobbyists that will help them get back in business.

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 or read other things he has written at 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.

Articles about financial companies taking advantage of soldiers

Stop Scamming Brave Soldiers. January, 2005

Payday Loans, Soldiers, and Donations to Congressmen, Saturday, 23 September 2006




Joe Elliott Show
Don McNay on the Joe Elliott Show

I will be on the Joe Elliott show on Monday, April 16th at 9 p.m. Joe has a tremendous show on WHAS-AM in Louisville. It is 840 on the AM dial and can be picked up around the United States. you can also listen on the internet at

Articles about Payday Loans in the Kentucky Governor's Race

Citizen Beshear and the Check Cashing Companies, December 17, 2006.

Steve Beshear Appearance on Bill Bryant's Newsmaker's (towards bottom of the page) Monday, January 22, 2007

Lunsford Wants to Restrict Fees and Rates of Payday Lenders by Ronnie Ellis, CNHI News Service, April 11, 2007

Lunsford Calls for Restrictions on Payday Loans. Polwatchers (Lexington Herald Leader Political Blog) April 11, 2007 by Ryan Alassi.

Lunsford Poised to Attack Beshear?, April 11, 2007

Bluegrass Festival of Books

Unbridled Book I
will be signing copies of my book, The Unbridled World of Ernie Fletcher at the Bluegrass Festival of Books.

It is in Lexington's Civic Center on Saturday, April 21 from 9 a.m. to 5 p.m.

There will be a number of big name authors at the festival and I am honored to be invited.

Find out more about the festival at:

Find out more at:

Don McNay LogoDon McNay

Author & Syndicated Columnist

Don McNay is an award winning syndicated columnist and author who views life with a rock and roll attitude.

He is the author of The Unbridled World of Ernie Fletcher.

McNay writes a weekly business and social commentary column and a bi-weekly column that focuses on Kentucky politics. All columns intertwine commentary with lyrics from popular songs.

Don's columns appear in the Richmond (Kentucky) Register and syndicated to over 200 cities through the CNHI News Service. He has also written for Trial Magazine, National Underwriter, Claims Magazine, Probe, Trial Diplomacy Journal and numerous business and legal publications.

McNay is one of the world's most successful structured settlement consultants for injury victims and lottery winners.

He has been named to the Million Dollar Round Table for 22 consecutive years and to the Top of the Million Dollar Round Table eight times. He has spoken to over 100 legal and financial groups around the United States, Canada and Bermuda. He holds several professional designations and was a director of the National Structured Settlement Trade Association from 1998 to 2001.

McNay has appeared on numerous television and talk radio programs and is a frequent guest on Kentucky Educational Television's Comment on Kentucky.

McNay has Master's degrees from Vanderbilt University and the American College in Bryn Mawr, Pa. He is a graduate of Eastern Kentucky University and was inducted into the EKU Hall of Distinguished Alumni in 1998.

Don has been featured in Forbes Magazine, The Lexington Herald Leader, The Courier Journal, The Cincinnati Enquirer, Registered Representative Magazine and Financial Planning Magazine.

Don McNay

P.O. Box 747, Richmond, Ky. 40476-0747