Team Infidel
Forum Spin Doctor
CNN
March 24, 2008
Issue #1 (CNN), 12:00 PM
GERRI WILLIS: Yesterday marked a very somber milestone in the war in Iraq. The overall U.S. death toll now stands at 4,000. For us here at home, it's hard to fathom the sacrifice our servicemen and women have made, the trauma they've endured on the front lines. But there's a different kind of hardship on our troops facing right here at home.
Barbara Starr joins us now from the Pentagon.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, hello to you, Gerri.
You know, so many military families are facing the same problems that other American families are -- rising costs, the paycheck not going as far. And for military families, of course, it's compounded by the stress and strain of perhaps long tours of duty in the war zone.
So, an organization called the Army Emergency Relief Organization, a private nonprofit corporation that works with the military, is stepping up and increasing its longstanding efforts to offer no-interest loans or grants to military families in economic trouble. We spoke to them, and they provided us with some really staggering statistics about the growth of the number of Army families that need this kind of help.
Let's look at some of these statistics. You know, in 2007, it skyrocketed. The number of families going up to 60,000, Army families or personnel needing help, needing $63 million in those no-interest loans or grants.
That's up significantly over the last four years. If you go back to 2004, that was $35 million to 39,000 troops and their families. A hefty chunk of change alone, but look at how much it's grown in the last four years.
And just in the first few months of 2008, as we continue to look at some of these numbers, we see the need is still increasing. The first two months of 2008, it was $8.7 million to some 9,483 troops that came to the Army saying they needed economic help, and that's up, of course, from the year before, $7.2 million for some 8,500 troops or so.
One of the things that the Army tells us is they're really trying to get those folks away from those predatory payday lenders. They'd rather they come to them for help than go to those lenders and get themselves in the even deeper economic trouble -- Gerri.
WILLIS: Why are we seeing a dramatic increase in military families in need, Barbara?
STARR: Well, you know, it's like a lot of other families on these fixed paychecks with the rising cost of fuel, food, housing. When they have an unexpected cost, then they're in trouble and that paycheck just doesn't go as far.
What they tell us in the Army is the kinds of things they're seeing troops coming and asking for help with is help in covering their rent or mortgages, medical bills, unexpected medical bills, unexpected travel for things like funerals, car repairs, disaster assistance, all of that sort of thing.
It's a case of where it's just like with other Americans, but it's an awfully stressful circumstance, especially when a family member is deployed. And if you are a military family and you're in trouble economically, what the Army says is, go to your base commander, see what is available to you through the Army Emergency Relief Organization, and ask for help before you get into even deeper financial trouble -- Gerri.
WILLIS: As always, you've got to take that first step to get help.
Barbara Starr, thank you for that -- Ali.
ALI VELSHI: As Barbara mentioned, a lot of military folks have been turning to payday loans. They actually have some protections that other Americans don't have. This is tough times, and all sorts of people are turning to these predatory loans.
CNN's Jennifer Westhoven joins us now with that story -- Jennifer.
JENNIFER WESTHOVEN, CNN CORRESPONDENT: I really can't stress enough how important it is not to get into these kinds of loans, because when we look at the statistics, they are so troubling. I mean, they sound so great, right? They can tide me over, just a few hundred dollars here, I can pay my bills, and then I'll just pay this back in two weeks when I get paid again.
The average, some statistics show, to complete these loans to pay them back, two years, not two weeks. One little setback, one car breakdown, you get sick, these fees and rates can really spiral out of control.
Look at this. For the average loan of just $325, the average person is paying back almost $800. Rates can really be from 400 percent to 800 percent when you put in the different fees that they put in there. I mean, that's a lot of money you could be saving paying your bills with.
And the big picture is the people who are in housing trouble are trying these. In Ohio, which has really been hard hit by the housing crisis, there are now more payday loan shops than McDonald's, Burger Kings and Wendy's put together.
Yes, I think that's really surprising. There's a lot of controversy heating up in a lot of different states to cap these like they did for some members of the military. They say it can only be 36 percent.
VELSHI: Only 36 percent? That's incredible.
WESTHOVEN: It's still a lot, but those payday companies say, hey, that will really put us out of business, because they also lose a lot of loans too.
VELSHI: Is this -- if you got rid of payday loans, for those who do depend on them, is that a bad thing or is it a good thing? I mean, it sounds with interest rates that we'd be better off without them entirely, but that means some people can't get money.
WESTHOVEN: In general, I think the preponderance of evidence is that they're very terrible. But there is a Federal Reserve study that says some people get out of bounced checks this way, that there are fewer bankruptcies because of them. But at the same time, what a risk to take on. And you can really end up paying for this for months and years.
VELSHI: And what a cost. I think you were telling me earlier that it's kind of like blaming the -- they say it's blaming the tow truck for the car breaking down. That's what the industry says.
WESTHOVEN: Right, if the tow truck costs twice as much as your car. Yes.
VELSHI: Yes. Jennifer, thanks so much -- Gerri.
March 24, 2008
Issue #1 (CNN), 12:00 PM
GERRI WILLIS: Yesterday marked a very somber milestone in the war in Iraq. The overall U.S. death toll now stands at 4,000. For us here at home, it's hard to fathom the sacrifice our servicemen and women have made, the trauma they've endured on the front lines. But there's a different kind of hardship on our troops facing right here at home.
Barbara Starr joins us now from the Pentagon.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, hello to you, Gerri.
You know, so many military families are facing the same problems that other American families are -- rising costs, the paycheck not going as far. And for military families, of course, it's compounded by the stress and strain of perhaps long tours of duty in the war zone.
So, an organization called the Army Emergency Relief Organization, a private nonprofit corporation that works with the military, is stepping up and increasing its longstanding efforts to offer no-interest loans or grants to military families in economic trouble. We spoke to them, and they provided us with some really staggering statistics about the growth of the number of Army families that need this kind of help.
Let's look at some of these statistics. You know, in 2007, it skyrocketed. The number of families going up to 60,000, Army families or personnel needing help, needing $63 million in those no-interest loans or grants.
That's up significantly over the last four years. If you go back to 2004, that was $35 million to 39,000 troops and their families. A hefty chunk of change alone, but look at how much it's grown in the last four years.
And just in the first few months of 2008, as we continue to look at some of these numbers, we see the need is still increasing. The first two months of 2008, it was $8.7 million to some 9,483 troops that came to the Army saying they needed economic help, and that's up, of course, from the year before, $7.2 million for some 8,500 troops or so.
One of the things that the Army tells us is they're really trying to get those folks away from those predatory payday lenders. They'd rather they come to them for help than go to those lenders and get themselves in the even deeper economic trouble -- Gerri.
WILLIS: Why are we seeing a dramatic increase in military families in need, Barbara?
STARR: Well, you know, it's like a lot of other families on these fixed paychecks with the rising cost of fuel, food, housing. When they have an unexpected cost, then they're in trouble and that paycheck just doesn't go as far.
What they tell us in the Army is the kinds of things they're seeing troops coming and asking for help with is help in covering their rent or mortgages, medical bills, unexpected medical bills, unexpected travel for things like funerals, car repairs, disaster assistance, all of that sort of thing.
It's a case of where it's just like with other Americans, but it's an awfully stressful circumstance, especially when a family member is deployed. And if you are a military family and you're in trouble economically, what the Army says is, go to your base commander, see what is available to you through the Army Emergency Relief Organization, and ask for help before you get into even deeper financial trouble -- Gerri.
WILLIS: As always, you've got to take that first step to get help.
Barbara Starr, thank you for that -- Ali.
ALI VELSHI: As Barbara mentioned, a lot of military folks have been turning to payday loans. They actually have some protections that other Americans don't have. This is tough times, and all sorts of people are turning to these predatory loans.
CNN's Jennifer Westhoven joins us now with that story -- Jennifer.
JENNIFER WESTHOVEN, CNN CORRESPONDENT: I really can't stress enough how important it is not to get into these kinds of loans, because when we look at the statistics, they are so troubling. I mean, they sound so great, right? They can tide me over, just a few hundred dollars here, I can pay my bills, and then I'll just pay this back in two weeks when I get paid again.
The average, some statistics show, to complete these loans to pay them back, two years, not two weeks. One little setback, one car breakdown, you get sick, these fees and rates can really spiral out of control.
Look at this. For the average loan of just $325, the average person is paying back almost $800. Rates can really be from 400 percent to 800 percent when you put in the different fees that they put in there. I mean, that's a lot of money you could be saving paying your bills with.
And the big picture is the people who are in housing trouble are trying these. In Ohio, which has really been hard hit by the housing crisis, there are now more payday loan shops than McDonald's, Burger Kings and Wendy's put together.
Yes, I think that's really surprising. There's a lot of controversy heating up in a lot of different states to cap these like they did for some members of the military. They say it can only be 36 percent.
VELSHI: Only 36 percent? That's incredible.
WESTHOVEN: It's still a lot, but those payday companies say, hey, that will really put us out of business, because they also lose a lot of loans too.
VELSHI: Is this -- if you got rid of payday loans, for those who do depend on them, is that a bad thing or is it a good thing? I mean, it sounds with interest rates that we'd be better off without them entirely, but that means some people can't get money.
WESTHOVEN: In general, I think the preponderance of evidence is that they're very terrible. But there is a Federal Reserve study that says some people get out of bounced checks this way, that there are fewer bankruptcies because of them. But at the same time, what a risk to take on. And you can really end up paying for this for months and years.
VELSHI: And what a cost. I think you were telling me earlier that it's kind of like blaming the -- they say it's blaming the tow truck for the car breaking down. That's what the industry says.
WESTHOVEN: Right, if the tow truck costs twice as much as your car. Yes.
VELSHI: Yes. Jennifer, thanks so much -- Gerri.