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University of Florida assistant law professor Chris Peterson co-authored a study that says payday lenders tend to operate near military facilities.

University of Florida assistant law professor Chris Peterson co-authored a study that says payday lenders tend to operate near military facilities. ()

WASHINGTON — Instant lenders are more likely to set up shop next to a military base than just about anywhere else in America, according to a recent study by two University of Florida researchers.

Law assistant professor Chris Peterson and geography assistant professor Stephen Graves examined the locations of thousands of payday lenders in 20 states, and found they tended to congregate in counties and zip codes near military facilities.

“All other things being equal, you’re less likely to find a bank and more likely to find an instant lender near one of these bases,” Peterson said. “We’re seeing many more payday lenders than we would have accounted for.”

For example, Alabama has 24 instant loan companies per 100,000 residents, one of the highest rates in the country. But in Houston County, where Fort Rucker is located, that ratio is even higher: 41.67 firms per 100,000 residents. The county has 37 payday lenders but only 35 banks.

Outside of Fort Bragg in North Carolina, 18 payday lenders have set up shop within three miles of the front gate. Fort Hood in Texas has 13 instant lenders within one mile of the base perimeter.

Peterson, a frequent critic of the instant loan industry, said the analysis shows that lenders are specifically targeting military personnel despite industry assertions otherwise.

“This is predatory lending in practice,” he said.

He compared the instant lenders’ practices to “mob loans” and added “just because they’ve put on a suit doesn’t mean they aren’t still loan sharks.”

Steven Schlein, spokesman for the Community Financial Services Association of America, said researchers there have not yet been able to review the study to see if only legitimate lenders were included in the survey.

“We don’t know if this is a real apples-to-apples comparison,” he said.

Schlein said many of his group’s members located near military bases have only a handful of military clients, and the association has adopted a list of guidelines for dealing with military customers.

More information: University of Florida Law.


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