WASHINGTON (12/8/15)--CUNA will bring its concerns with the recent changes to the Military Lending Act (MLA) directly to federal regulators this week. Since the Department of Defense (DOD) first proposed the changes in September 2014, CUNA has met with the DOD, regulators, written to Congress expressing concerns that the changes could impact credit union services.
At the meeting, CUNA will reiterate its positions that credit unions do not engage in the predatory lending practices the rule is intended to combat, and are dedicated to ensuring the financial well-being of their members.
The DOD finalized its proposal in July, expanding the types of credit products covered by a 36% interest rate cap and other military-specific protections. It went into effect Oct. 1 (with a mandatory compliance deadline of Oct. 3, 2016), leading the National Credit Union Administration to issue a regulatory alert.
In its initial comment letter on the proposal, CUNA pushed the DOD to exempt credit unions from the regulation.
CUNA also requested the DOD work with the NCUA to ensure the agency’s Payday Alternative Loan (PAL) product can still be offered, and the final rule allows for PALs.
CUNA published an analysis of the rule, and hosted a webinar (currently available for purchase) on the finalized changes to the MLA, while Credit Union Magazine examined how the changes will affect products offered by credit unions.