CUNA followed its push for a 6-month extension of the Oct. 3 effective date for changes to the Military Lending Act (MLA) rule this week with a joint letter sent to Federal Financial Institutions Examination Council (FFIEC) member agencies requesting the agencies to delay examination of the new rule. FFIEC member agencies include the NCUA and the Consumer Financial Protection Bureau (CFPB).
“Given the delays associated with clarifying the rule and setting up systems to ascertain military status--and the severe penalties for MLA violations--we urge the agencies to provide express assurances that MLA examinations will be limited to inquiries about the status of preparations to comply and that examiners will postpone transactional testing for compliance until after March 3, 2017—giving industry six months to implement and test its MLA compliance systems,” the letter reads.
“We believe that this approach is not only fair and practical, but will help to ensure that military personnel, their spouses and dependents continue to have access to depository institution credit products they need and value.”
The Department of Defense (DOD) finalized changes to the MLA rule in July 2015, adding protections on loans made to covered servicemembers. Since then, CUNA has had a number of meetings with the DOD to share industry concerns and push for guidance.
The DOD issued guidance on the rule change last week.
CUNA wrote to the DOD earlier this week requesting a 6-month delay in the MLA rule’s effective date, and if not, for a 6-month safe harbor for entities making efforts to comply.
In addition to CUNA, the joint letter was signed by the American Bankers Association, Association of Military Banks of America, Consumer Bankers Association, Independent Community Bankers of America and the National Association of Federal Credit Unions.