A bipartisan group of representatives wrote to the Department of Defense (DoD) Wednesday highlighting concerns shared by CUNA about unintended consequences of the Military Lending Act (MLA). The members of Congress highlight ways the MLA changes, finalized in July 2015, could be impeding access to credit for military credit union members and their families.
“Of great concern, I have heard from credit unions that they are being forced to cut back on, or eliminate, products that help find solutions for credit for servicemembers and their families that may have few, or much worse, alternative options,” the letter reads. “This is a result of overly complex new requirements that are very difficult to understand and comply with. Such an unfortunate result harms not only credit unions’ servicemember members but their entire memberships.”
"CUNA appreciates Rep. Cook's leadership on this important issue and thanks all the Members of Congress who expressed their bipartisan concern regarding the MLA changes," said Jim Nussle, CUNA president/CEO. "CUNA has worked extensively with Congress and DoD for an outright exemption, and, short of that, guidance to help ensure credit union compliance with the rule."
The members of Congress ask the DoD to exempt credit unions from the July 2015 MLA changes, particularly as credit unions are not the unscrupulous lenders the rule is targeting.
“If the DoD believes it is unable to exempt credit unions, we urge it to examine the MLA regulation—focusing on the July 2015 amendments—to determine how it can be revised in a way that minimizes the unnecessary impact it is having on credit unions and other regulated financial institutions,” the letter reads.
The members also ask the DoD to consider delaying the effective date of the MLA’s application to credit cards, which is currently Oct. 3, since the DoD has not issued interpretive guidance to aid credit unions to stay in compliance.
The letter was led by Rep. Paul Cook (R-Calif.), a retired Marine colonel, and signed by Reps. Marcy Kaptur (D-Ohio), Tim Ryan (D-Ohio), Tom Garrett (R-Va.), Tom O’Halleran (D-Ariz.) and Jackie Speier (D-Calif.).
The letter was addressed to Andy Cohen, director of the Office of Financial Readiness at the Office of the Under Secretary of Defense (Personnel and Readiness).
CUNA Chief Compliance Officer Jared Ihrig and Defense Credit Union Council President/CEO Tony Hernandez met with Cohen and other DoD leaders Wednesday before the letter was delivered.