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Commander's Corner: Shipmates can prevent indebtedness, alcohol-related incidents

August 4, 2006 - San Diego, California

Shipmates, I need your help in fixing two issues that are effecting our ability to meet our mission in the region. Financial indebtedness and alcohol-related incidents are taking a toll on our readiness, and the truth is both of these issues are totally preventable. I am asking each of you as leaders and shipmates to turn these trends around.

The first issue that is having a direct impact on our ability to deploy Sailors in support of the global war on terror can be linked to a disturbing trend in predatory lending practices that specifically target military personnel. This is not a small issue; in fact recent data shows that nearly one in five Sailors on duty today has used a payday lender. The problem here is that too often a Sailor who needs financial help badly enough to seek a payday loan, is unable to repay the loan. This practice leads to new fees being added on to the original loan every two weeks. Often, these so-called fees equate to an annual percentage rate of well over 1,000 percent. If you borrow $100 and pay someone a $15 fee for that privilege, it equates to 425 percent APR.

The problem here is that when a Sailor becomes buried in debt, he or she risks losing a security clearance. Without a security clearance, the Sailor is unable to deploy and becomes a liability to the Navy. This is quite simply an unnecessary consequence to a situation that can be prevented. Sailors need to know that there are many options available for those facing financial difficulties.

Of course the best way to avoid financial problems is to avoid them in the first place. It is important that you know how to control your spending. If you haven't already done so, prepare a budget or spending plan to help guide your spending from payday to payday. If you haven't already done so I recommend saving for the unforeseen needs. It is a good idea to have at least 10 percent of your annual salary set aside for emergency expenses. If you have never set up a personal budget before, there are resources available to help. See your command financial specialist and consider opening a TSP account.

Too often Sailors are embarrassed to discuss their financial challenges with anyone, let alone a member of their chain of command, some Sailors even claim they did not know that their command has a financial specialist. By regulation (OPNAVINST 1740.5A), every command should have at least one CFS for every 75 Sailors assigned. Command financial specialists have the training to help Sailors find the best way out of financial trouble. I want every Sailor to know that the CFS is there to help. In addition to command financial specialists, there are professionals available at the Fleet and Family Support Center who can help you get your finances in order.

For the times when it is too late for a simple budget to fix an urgent financial need, there are more sensible options to payday lending. Too often Sailors see payday lenders as a way out of financial trouble. The truth is that these types of loans can lead to financial problems that are much worse. If you are truly having a financial emergency, try seeking help from the Navy and Marine Corps Relief Society first. Quite often they can provide just what you need in terms of a loan and budgeting to get you through the emergency without getting you deeper in debt. Another option would be to ask for a loan from your credit union. Credit unions are non-profit organizations and offer reasonable loan rates. Both of these options are far less expensive than a visit to a payday lender.

The Navy is taking steps to reduce the impact of predatory lending on our Sailors. In fact we have a joint task force along with the Marines and Air Force to combat the problem in California. We are working to train our people on how to identify the hazards of predatory lending practices. We are working to change our culture to one that is more financially aware and less financially embarrassed. And we are partnering with local business and the state legislature and to seek better loan alternatives and legal protections for our military. Our efforts with the state of California are starting to pay off and have with the strengthening of Assembly Bill 1965 to provide stronger protection against payday lenders for military personnel. Though we are making headway in combating predatory lending, we continue to combat any predatory practice that targets our military force. We will continue to seek new protections from both state and federal law.

But the most important part of combating predatory lending is yours. You have the responsibility to identify the problem, not just in your personal lives but that of your shipmates. As Capt. Mark Patton, the leader of my joint task force on predatory lending likes to say, "Shipmates don't let shipmates use predatory lending."

While payday loans are the most obvious predatory lenders, they are not the only ones using predatory tactics to take your money. Rent-to-own establishments are actually cleverly disguised high-interest loans. In fact the financial world is full of clever ways to transfer more of your money to the lenders' accounts. I urge you to think twice before your enter into a financial agreement without knowing exactly what it is going to cost you.

The second point I want to emphasize is the need for responsible use of alcohol. Far too often Sailors are finding themselves in trouble due to excessive alcohol consumption. Alcohol causes people to lose their better judgment. In a vast majority of the sexual assault cases, alcohol is most often a contributing factor. The same is true of our reported incidents of domestic violence.

Of course everyone knows that alcohol and driving do not mix, yet we continue to have Sailors arrested for DUI offences. This is simply not acceptable. Nothing will ruin your career faster than an arrest for an alcohol related offense. Understand that DOD policy requires revocation of on base driving privileges for a period not to exceed one year. That policy is being enforced throughout the region.

Most recently I have determined that I needed to establish a good reasonable guideline for my commanders to adopt which outlines the terms of responsible drinking. Something that is consistent with the Right Sprit Campaign. A litmus test so to say, that one might apply when determining how much you might consider is responsible consumption. A good rule of thumb to stay safe and out of trouble if you are going to drink is to remember these very simple numbers . . . 0-0-0-1-3. The first 0 means no drinking if you are younger than 21. The second 0 is no drinking if you are going to drive. The third 0 means no drinking if you are in a duty status. The number 1 is the maximum amount of standard size drinks you can safely consume in an hour. And the number 3 is the maximum amount you should consider drinking in a single day. If you and your shipmates follow these guidelines, you are far less likely to get into trouble as a result of alcohol.

The impact of financial issues and alcohol related incidents on our mission readiness is significant, that is why I'm asking each of you to not only take a look at these areas in your own lives, but also to look out for your shipmates as well.

News Source

Navy Compass, Rear Admiral Len R. Herring, Commander, Navy Region Southwest

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