An opinion piece appearing this week in Stars and Stripes credits CUNA and other organizations for pushing for improvements to Military Lending Act (MLA) regulations, saying the changes implemented in 2015 could make it harder for servicemembers to obtain financial services. CUNA has engaged with the Department of Defense (DOD) consistently since the MLA changes were finalized, most recently asking the department to issue an interim MLA rule to fix the issues.
The organizations “wrote to the Defense Department seeking more clarity on a number of the rule’s provisions, as well as places where it appears to be inconsistent with the department’s interpretive guidance. The lenders also seek a one-year delay before the MLA is applied to credit card products, which could further constrain military families’ access to credit,” writes R.J. Lehmann, editor-in-chief and senior fellow with the R Street Institute.
Absent a delay, the credit card provisions are set to take effect this October.
Lehmann cites unintended consequences, such as making it harder to obtain short-term, small-dollar loans, of the rules that were originally intended to help military families.
NCUA’s payday alternative loan (PAL) program, which caps interest rate, loan terms and fees, are intended to be a consumer-friendly option, but per data recieved through CUNA outreach, 86% of military credit unions saw PAL loans decrease in 2016.
Non-military credit unions only saw a 47% drop over the same time period.
Another concern raised by Lehmann and shared by CUNA relates to the process of checking a borrower’s military status against the rolls kept by the Defense Manpower Data Center.