The Department of Defense (DOD) will release guidance in the coming weeks on changes to the Military Lending Act (MLA) that will become effective Oct. 3. CUNA, at the DOD’s request, sent potential revisions on the MLA changes, and has continued its push for guidance before the October compliance deadline.
The DOD finalized changes to the MLA last year, adding new requirements to loans extended to covered military servicemembers. Covered loans to borrowers cannot exceed a 36% military annual percentage rate (MAPR), which will be calculated under new requirements outlined in the rule.
CUNA is concerned that, with the implementation period for the rule 2 months away, credit unions have not been provided clarifications needed to assure they can continue to serve the military in a consumer-friendly way.
CUNA has asked the DOD for months to provide compliance guidance for the changes, and asked for several substantive changes to the rule.
CUNA has requested clarifications to assure that servicemembers can continue to receive credit from one of their safest and best options, credit unions:
CUNA also expressed strong opposition to changes to the process by which creditors determine whether a consumer is a covered borrower, which it believes could present challenges that could jeopardize or reduce the availability of credit to servicemembers.