WASHINGTON (4/11/16)--The Credit Union National Association (CUNA) responded to a U.S. Department of Defense (DOD) request for guidance language on changes to the Military Lending Act (MLA) regulation last week. CUNA, which raised a number of concerns during a March meeting with the DOD, also signed onto a joint letter with other trade organizations last week recommending clarifications and modifications.
The DOD finalized changes to the MLA regulation in July 2015, extending the definition of “consumer credit” for military servicemembers to a much broader range of open- and closed-end products, beyond the traditionally included categories of payday loans, vehicle title loans and refund anticipation loans. Covered loans to borrowers cannot exceed a 36% military annual percentage rate (MAPR).
Compliance with the changes is mandatory by Oct. 3.
In meeting with the DOD last month, CUNA was the only participant to provide a document listing credit union compliance questions and issues. The DOD followed up with CUNA, requesting language for potential guidance for MLA implementation.
In its separate letter, CUNA’s guidance suggestions include:
CUNA’s joint letter outlines additional suggestions and solutions for various issues in the final rule's language.
The joint letter was also signed by the American Bankers Association, American Financial Services Association, Association of Military Banks of America, Consumer Bankers Association, Independent Community Bankers of American, National Association of Federal Credit Unions and the Financial Services Roundtable.