CUNA compliance staff has updated its Military Lending Act (MLA) fee comparison spreadsheet for the second quarter of 2018. The resource can be found in CUNA’s Compliance Community under the “Compliance Resources” tab, and under the “Resources” tab in the MLA topic in CUNA’s e-Guide.
CUNA launched this resource in October to help credit unions determine which fees are considered “reasonable and bona fide” under the MLA. Under a safe harbor in the MLA rule, a credit union may exclude a Bona Fide credit card fee from the military annual percentage rate (MAPR) if the fee is considered “reasonable.”
This means the fee must be less than or equal to the average fee for the same or similar product charged by five separate card issuers, that each have at least $3 billion in outstanding credit card balances at any time during the three-year period preceding the time the average is determined.
Approximately 20 large card issuers meet this requirement, which collectively have around 260 card agreements in the Bureau of Consumer Financial Protection’s Card Agreement Database, 85 of which appear to be useful for MLA purposes.
Charges that can be excluded generally include charges such as cash advance fees, foreign transaction fees, balance transfer fees, transaction fees for purchases and minimum interest charges.
The exclusion does not apply to fees or premiums for credit insurance, fees for a debt cancellation contract, fees for a debt suspension agreement, or to fees for a credit related ancillary product. Those fees must be included in the calculation of the MAPR.