ALEXANDRIA, Va. (3/4/16)--The National Credit Union Administration (NCUA) this week released guidance on how to comply with changes to the Department of Defense’s Military Lending Act (MLA). The guidance, Complying With Recent Changes to the MLA Regulation, was issued as a regulatory alert (16-RA-04).
Starting Oct. 3, lenders will be required to determine the military status of all applicants for many forms of consumer credit. The MLA places certain protections over covered borrowers, including a cap on annual percentage rates,
Compliance with related changes for credit card accounts will be required starting Oct. 3, 2017.
The alert contains an enclosure that explains the types of credit that will be affected, the new consumer protections that will be provided and the steps credit unions will need to take to comply.
One notable exception to the changes involves Payday Alternative Loans (PALs), which under the MLA, one application fee in a rolling 12-month period can be excluded from the military annual percentage rate.
Compliance with most of the changes is required starting Oct. 3, and the NCUA will issue revised examination procedures covering these changes before that date.
The Credit Union National Association has released a final analysis of the rule, available here.