While the Department of Defense (DOD) has affirmed the Military Lending Act’s (MLA) effective date for credit card accounts of Oct. 3, CUNA is engaged with legislators to build support for efforts to exempt credit unions from the rule. Rep. Paul Cook. (R-Calif.), member of the House Armed Services Committee, circulated a Dear Colleague letter this week requesting DOD exempt credit union from the MLA regulation as amended in July 2015.
Cook’s letter aligns with CUNA’s position over the past few years that the provisions of the MLA should not apply to credit unions, as they are not engaged in the predatory practices the rule is focused on.
Going forward, CUNA and leagues will continue engagement with policymakers to build support for Cook’s effort. CUNA will also continue its push to the DOD for changes to the MLA, as well as necessary interpretive guidance.
While CUNA supports the goal of protecting servicemembers, it believes the requirements of the MLA are having unintended consequences by forcing credit unions to cut back on, or eliminate, products designed to provide servicemembers and families with access to credit.
CUNA joined with the Defense Credit Union Council in May to share data showing the MLA changes have cause military credit unions to decrease offering consumer-friendly products such as the Payday Alternative Loan program.
CUNA also joined with other financial services trade organizations in June to ask for an interim rule to fix a number of issues with the rule. An opinion piece appearing in Stars and Stripes in July supported CUNA’s suggested changes.