Recently, a 25-year-old Jacksonville, Fla. based Navy aircraft mechanic needed an extra $300 to pay for unexpected expenses, so he went to a well-known local company for a loan to cover him until payday. On payday he did not have enough money in his paycheck to cover his regular bills plus this cash advance. He could not let the check to the original lender bounce, so he went to yet another local company for an additional loan and wrote several more checks totaling $390 to cover the original $325 advance plus fees. And so started a trend that went payday after payday until five months later he was writing checks totaling $2950 to cover the "floats" created by the original $300 loan.
According to the Navy and Marine Corps Relief Society, millions of Americans every year are targeted by lenders who market to the young, under-informed and under-privileged. These "lending predators" seek out vulnerable citizens who feel that they have limited lending resources available and are unwittingly and, more often than not, led down the road to financial ruin. To better protect sailors from these "lending predators," Comptroller of the Navy Charles Nemfakos announced today that the Navy is initiating a new Navy Personal Financial Management (PFM) program starting this fiscal year. The new PFM curriculum is designed to develop good financial habits early in the training of officers and enlisted personnel and prepare them to avoid these "lending predators."
The Navy's initiative will provide two days of professional non-military instruction at "A" schools and apprentice training for nearly 57,000 boot camp graduates; a PFM undergraduate level education for United States Naval Academy midshipmen; and expanded Bureau of Personnel outreach to junior sailors, spouses and command financial specialists.
"There is considerable evidence of the importance of providing our sailors with a sound foundation of personal financial management skills early in their careers," Nemfakos said. "Providing such a foundation would result in reducing disciplinary problems in the fleet and domestic problems at home; failing to provide it would contribute to the erosion of the Navy family."
The Department of the Navy budget for the PFM initiative includes $6 million this fiscal year for startup costs and a six-month development period and $8.9 million in fiscal year 2002. The Chief of Naval Education and Training (CNET) has developed an implementation plan which includes awarding a contract in Spring 2001, followed by a pilot program, and commencing training as early as August 2001.
For more information on this program, contact Chief of Naval Education and Training Public Affairs Officer Cmdr. Anthony Cooper at (850) 452-4860.