Like Fish In A Barrel: JPMorgan and G.I.'s

If the war on terror actually exists in anything resembling the sweeping dramaturgy it inhabits on the airwaves, then the war requires internal enemies, fifth columnists and moles to complete the stage show. I nominate banking giant JPMorgan Chase & Co. to the ranks of the most invisible nemeses, as only fifth columnists and traitors must be to qualify for the role.

Here's how the treason works: Respectable JPMorgan, America's second-largest bank, quietly funnels tens of millions of dollars in liquid credit to predatory "instant cash" lenders known as payday lenders, who charge thousand-percent annual interest rates to U.S. soldiers, but couldn't survive without the helping JP hand. By their phenomenal spread-there were 200 payday outlets nationwide in 1993; today there are 22,000-the paydayers have accrued generous profits, to the tune of $6 billion in fee revenue from $40 billion in loans during 2003, according to Bloomberg News.

In New York City, payday outlets often situate near housing projects and in pawn shops, among them Claremont Check Cashing Co. in the Bronx, on Claremont Parkway, targeting 25,000 low-income residents. Claremont Check Cashing, in effect, is the only "bank" in the neighborhood. This is the kind of bank where typically you borrow $300 and pay a $90 fee. Then, if statistics hold strong, you roll the debt over two weeks later for another $90, an annual interest of 780 percent-and roll it again, and again, forever in chains to usury.

Elsewhere, in more auto-dependent America, payday outlets tend to spring up on strip-malls, in the painted ruins of defunct drive-thru banks, and in the especially fertile ground around military bases.ÊPayday outlets in some cases "surround" military bases, according to the National Consumer Law Center, which offers that the payday system is a kind of loan-sharking.ÊMilitary youth are ideal targets for legalized loan-sharking. ÊThe enlisted have a guaranteed income, no credit history. They are young, and when they handle money, they spend it, probably faster than they should. The payday outlet, in answer, asks nothing more than their current pay stub, ID and proof of a checking account.

Bloomberg News reports that as a result of this blanketing of the military, installations such as Fort Bragg count at least two soldiers a week seeking counseling for desperate indebtedness to payday lenders. After all, default on too much debt means a dishonorable discharge. In the darkness of their worry, the training is inevitably diminished, the preparedness reduced. "It affects a soldier's mission readiness," a staff sergeant at Fort Bragg tells Bloomberg News. "That can affect a whole unit, big time."

Thus do the men and women who die in Iraq for lack of preparedness owe their lives, in some part, to JP Morgan Chase & Co., which by death's meager settlement can at last attest that the loan is satisfied.

-Christopher Ketcham