The Pentagon Federal Credit Union Foundation, part of $16.8 billion PenFed in Alexandria, Va., talked up its Asset Recovery Kit program as the Department of Defense considers tightening rules that apply to military lending.
"We've heard a lot recently about service members taking out payday loans with as much as a 19% interest rate or even higher," said Jane Whitfield, PenFed Foundation president/CEO. "High-interest loans don't solve a military family's financial problems, they just make them worse, so we came up with a better option."
As part of the ARK program, qualifying active duty, reserve and National Guard personnel can borrow up to $500 or 80% of the borrower's net pay for a flat fee of $5 and no interest for one month. Loan documentation is simple, and up to three loans in six month are available.
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