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Service members cautioned about using quick cash outlets

By Pfc. Joshua Bozeman | | July 7, 2000

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Promises of quick cash are waved in the faces of Americans everyday. Businesses offer countless ways to make a quick buck. Loans are flaunted everywhere from banks to pawnshops.

An article was recently published in the Marine Corps, Navy, Air Force and Army Times highlighting ways to earn quick cash.  Attempting to list methods by order of effectiveness, the author placed emphasis on the paycheck loans, pawn shops, cash-for-title loans, etc.  The article also placed a low emphasis on one of the privileges open to military personnel.

The president of the Navy-Marine Corps Relief Society was displeased with the article. Retired Adm. J.L. Johnson said in a letter to Sailors, Marines and their families that though the article claimed the NMCRS was narrow in choosing who it assisted, the truth was that the society should be the first place servicemembers go when they are in need of financial assistance. The organization exists specifically to help military personnel and their family members with any needs they may have.

I was shocked and very upset about it (the article) because it was very misleading to the servicemembers,Ó said Tonia L. Nemecek, branch manager of the NMCRS here.

I think it underplayed the fierceness of going to some of the short-term loan places like the payday loan, pawn shops and car-title loan places, Nemecek continued. It really didn't highlight the expense the servicemember was actually going to incur. In most cases it puts him in a worse financial situation than he started in.

Though the article said the NMCRS was narrow in deciding whom it helped, Nemecek disputed that statement.

We take each case on an individual basis, she said.
It depends on what is going on with the servicemember. Our goal is to help them achieve financial independence. We don't want to do short-term fixes without looking at long-term affects. 

A lot of the problems stem from living paycheck to paycheck, said Jim F. Mahnken, a financial counselor here. It is important that people work to gain financial stability. Planned savings would help personnel avoid extreme situations in the first place.

Mahnken recalled a story of one of the Marines here in Albany who was having trouble with his finances:
A young lance corporal was planning to get married, he said.  He found that he would need a lot of money in a short time to have the extravagant wedding that he desired. He went to the Navy-Marine Corps Relief Society for money, but an expensive wedding wasn't classified as a need.

He went to a car-title pawn shop instead. 
These places are set up for people with spotty or poor credit. They charge outlandish interest fees and they are not fully regulated like other lending agencies, said Mahnken.

The lance corporal received two loans from the dealership:  one with his car title as collateral and the other with furniture. He had to pay 100 percent interest on one loan and 85 percent on the other.
That's just one real life example here, said Mahnken.
In a situation like that, he added, the lender not only has your signature on outrageous payments, but the title to your property as well.

Mahnken went on to say that in about 45 states, businesses like that are perfectly legal because they donÕt use the term interest they say special money for fees and services.

As a result of these varying terms, Mahnken said, the loans are not regulated. The state doesn't have a problem with someone paying 250 to 300 percent in Ôspecial money for fees and services. 

So where should you go in situations where you need money in a hurry?
The best piece of advice is to be proactive, said 1st Lt. Reid Walters, deputy director of Marine Corps Community Services. If you do end up in unexpected circumstances, then don't become prey to paycheck loan companies, pawn shops, or any other quick cash type of organization.

That involves a great deal of planning ahead, agreed Mahnken.
Being proactive also means that you plan current actions for long-range benefits. Begging mom and dad for money, or closing your car or home and paying off a debt, is not going to leave you in a position to be responsible. We have a number of services located at Building 3600 that can help you with any immediate binds and to plan for a more efficient financial future, Walters said.

All it takes is a little time to go down there and see what they can do for you at Personal Services, Walters said. The benefits far outweigh the price you pay.
Even if they aren't able to give financial aid, they can still help point someone in the right direction, Walters said. You'll definitely find other routes for the future Ð how to keep yourself out of problems. They can say here's how you could be doing something different with your financial plan.

In other words, invest in knowledge, Mahnken said. There is a smart way, and a not-smart way to get financial aid. Don't fall prey to predatory lending.
For a Marine, balancing the checkbook goes back to the Corps values, said Mahnken. Marines must have honor in handling finances, courage to be responsible with them, and commitment to keeping them stable.

Mahnken offers classes and counseling on financial matters. He encourages all Marines to attend. 
For information, call Mahnken at 639-5277/8.
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