Thanks to regulations that went into effect on Monday, the interest rate on payday loans to members of the military and their family cannot exceed 36% a year. That may not sound like good news, but since these loans typically carrying 400% rates, it’s definitely progress, and will save money for many members of the armed services.

Also in the good news department: Payday lenders can no longer use military members’ personal checks or electronic access to their bank accounts as collateral. This will reduce stress and make it less likely that military families will be trapped into one payday loan after another.

Payday lenders lie in wait for military folks with money troubles. To find out why they pick on people the rest of us would help if we could, I called Carol Hammerstein at the Center for Responsible Lending, one of the key nonprofits that has been exposing the excesses of payday lenders. As Carol explained it, military bases are targeted because they have a lot of “young, financially inexperienced families in a small area.”

No matter that they are willing to die for our country, they’re a captive audience of cash-strapped young people with steady paychecks. No matter that the military member of the family is about to be deployed, regardless of her views on the war. Who cares if the car breaks down, and she wants to leave her mate with a working vehicle so he can get the kids to day care?

She needs a quick loan with no credit check and is unaware of her other options. As she’s about to drive onto the base, she passes some of the payday lenders with their military-sounding names. Her emergency too soon becomes guaranteed income to a payday lender. That disgusts me.

Know Anyone in the Military?
Please make sure they know about Military OneSource, which offers them free, confidential financial guidance, toll-free, 24/7 at (800) 342-9647. Chances are, they’ll find out that there are payday loan alternatives right there on the base.

You can help them find out about other alternatives and share Credit.com’s “Truth about Payday Loans” with them.

When 36% a Year Isn’t Enough
You’d think that earning 36% a year off of military families would be enough. No way, say payday lenders in Utah, who stopped loaning to the military on Monday because of the "low" rate. Like I said, disgusting.

The nonprofits want the Pentagon to tighten the regulations and remove loopholes. Sounds like a good idea to me. What say you?   

Nancy Castleman – Co-author of "Invest in Yourself: Six Secrets to a Rich Life" and founder of Good Advice Press. Nancy has spent the last 23 years teaching people how to get out of debt, save money, and live better on less. She writes on all these subjects for CreditBloggers.com.