OCEANSIDE —- New regulations on the payday-lending industry are prompting business owners to cut back here and there, a turn that cheers consumer advocates who have long complained that exorbitant interest rates weigh heavy on young, inexperienced and impoverished borrowers. Military Lending Act, which took effect in October, set a 36 percent cap on the annual rate that lenders can charge to active-duty service members and their families. Consumer advocates’ chief argument against payday lenders is that most borrowers become habitual clients, who often roll over the loan into a second, third, or even 10th pay period, and end up owing many times what they initially borrowed. Lyndsey Medsker, a spokeswoman for the Community Financial Services Association of America, the largest association representing payday lenders and check cashers, said fewer than 5 percent of the industry’s clients are active-duty military, an assertion the industry made repeatedly during Congressional hearings on the law. Medsker said data her association obtained from the Defense Department indicated that payday loans are actually very low on the list of service members’ worries, far less important than mortgage or car payments. The association’s Web site clearly advises borrowers that payday loans aren’t a permanent solution to budgeting problems, though companies’ financial reports and university studies have indicated that borrowers take out an average of seven to 10 loans per year, according to the non-profit Center for Responsible Lending. Read More