The NCUA will take a good faith approach to examining a credit union’s compliance with the Military Lending Act changes that became effective Oct. 3, the agency said in a letter to federally insured credit unions (16-CU-07) this week. According to the NCUA, it will take the same approach it used when examining for compliance with the Ability to Repay rule in 2014 and Integrated Disclosure rule in 2015.
“NCUA examiners are instructed to accept a credit union’s reasonable and good faith efforts to comply with the new rule during the first examination following the implementation date,” the letter reads. “NCUA recognizes that some credit unions may need time to implement changes and work with their technology vendors to resolve problems that may arise from extensive testing and use, once their new MLA systems become fully operational.”
The letter points out that the agency’s acceptance of good faith efforts for supervision purposes does not shield a credit union from civil liability that may arise under the MLA.
“Your principal and most immediate goal should be to ensure servicemembers and other covered borrowers are receiving the consumer protections the MLA provides,” the letter reads.
During the first examination that occurs after Oct. 3, NCUA field staff will focus on:
For more information, see CUNA’s CompBlog.