Navy Captain Mark Patton is interviewed by Marketplace's Nancy Marshall Genzer. Patton recently headed a task force on the financial health of Navy personnel.
Navy Captain Mark Patton is interviewed by Marketplace's Nancy Marshall Genzer. Patton recently headed a task force on the financial health of Navy personnel. - 
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Steve Chiotakis: For much of this decade, thousands of U.S. troops have been barred from overseas duty because they're mired in debt. The Pentagon is tackling the problem with a financial literacy offensive. But the battle wages on. Here's Marketplace's Nancy Marshall Genzer.

Nancy Marshall Genzer: This is the enemy:

Ad: If you are active duty or retired military, and you need a computer, TV, electronics, furniture, than you need to visit . . .

That's a payday lender ad targeting military personnel. Used to be that short-term loans carried triple-digit interest rates for service members. Congress capped those rates for them.

Even so, lenders target service members routinely, says Michael Lehnert, a Major General in the Marines. He says lenders know a bit about military culture and like service members' steady pay.

Michael Lehnert: The predatory lending industry knows that we are going to require our Marines to pay their legal debts. Even if it is probably not a just or moral debt.

If the debt isn't paid, the service member's security clearance is yanked. The fear is indebted troops could be vulnerable to bribery.

Holly Petraeus: It's kind of the old classic spy movie thing, you know.

That's Holly Petraeus. Yes, she's married to General David Petraeus, who commanded U.S. troops in Iraq. She runs a military hotline at the Better Business Bureau.

Petraeus: If you are really, really hurting for money, sometimes your judgment may not be so good about where you accept money from.

Thousands of troops have lost their clearances because of financial issues. It's only a small percentage of overall U.S. forces, but the Navy's been hard-hit. Clearances are essential. You can't deploy on a ship without one.

Navy Captain Mark Patton recently headed a task force on financial health:

Captain Mark Patton: And so the Navy started looking and says well, this is about 1,500, 1,600 people that aren't getting their clearances, can't do their jobs. What's the root cause?

Well, returning troops have extra cash in their pockets from hazardous duty pay. But not enough to cover the cars and computers they crave. And they don't have a lot of experience with money.

Now, all troops have to take personal finance courses. Navy and Marine security clearance revocations have been cut in half since 2004. Still, Patton isn't satisfied.

Patton: I think it'll take more than 10 years to really turn the tide on financial health, and the way that our sailors look and treat their financial fitness as a core part of their ability to do their job.

Patton knows the predatory lenders will keep doing their jobs. This enemy isn't about to surrender.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

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