CUNA secures DoD assurance on DMDC guidance

February 26, 2016

WASHINGTON (2/26/16)--The U.S. Department of Defense (DoD) has agreed to a Credit Union National Association (CUNA) request to develop explanatory materials regarding the department's Defense Manpower Data Center (DMDC) database.

The exchange occurred this week during a joint trade group meeting with both the DoD and the Consumer Financial Protection Bureau.

Lenders, such as credit unions, must use this DoD database to qualify for a safe harbor under the department's Military Lending Act (MLA) regulation, which goes into effect in October. That new rule greatly expands the scope of products covered by the MLA's protections for military servicemembers and their families--protection such as a 36% interest-rate cap on loans.

CUNA has identified points of confusion regarding credit unions' options for accessing the database, which will be:

  • Through a DMDC MLA website;
  • Through a DMDC MLA Web Service (which is a direct connection to the database); and
  •  Through one of the national credit reporting agencies.

The DMDC MLA Web Service is still being developed and will be available only to a handful of large lenders with a high volume of covered borrower status requests.

At this week's meeting, CUNA asked DoD to provide explanatory material since there are pros and cons to each option. CUNA also is working with the National Credit Union Administration on compliance guidance for the MLA regulation.

See CUNA Compliance's detailed Final Rule Analysis for more information about the regulation.