Payday Lenders Target Servicemembers and Veterans - What Will Your Credit Union Do About It?

Servicemembers and veterans are disproportionately targeted by payday lenders, with young military personnel and veterans often falling prey to predatory loans due to financial strain and limited access to affordable credit. In some states, such as Texas and Nevada, payday lenders cluster near military bases and veterans’ facilities, exacerbating the issue. These high-interest loans can trap borrowers in cycles of debt, undermining their financial stability. Despite the public's overwhelmingly negative view of payday lenders, their presence persists—and unfortunately thrives—in vulnerable communities.

Credit unions have both an opportunity and an obligation to step in. By offering responsible, accessible microloans and financial education, credit unions can provide a lifeline to those who serve while also strengthening the argument for preserving their tax-exempt status. Stories like that of Wendy, a preschool teacher who lost her job over an unaffordable car repair, echo the same hardship many servicemembers face. Affordable microloans not only prevent financial freefall but also build lifelong member relationships. It’s time for credit unions to demonstrate how they uplift their communities through tangible support—not just to help those in need, but to protect the core mission that justifies their tax advantages.