CUNA, DCUC provide data to DOD showing negative MLA rule impact

May 12, 2017


Contact: Vicki Christner – CUNA Communications; 202-329-9950;  

Washington, DC (May 12) – CUNA and the Defense Credit Union Council (DCUC) laid out the findings from the group’s recent survey on the Military Lending Act (MLA) to the Department of Defense (DOD). The study found the MLA rule is having an adverse impact on lending to servicemembers as a result of certain provisions of the DOD’s regulation. 

CUNA analyzed NCUA call report data between 2009 and 2016 of credit unions with significant military membership and found the ratio of personal unsecured loans per member decreased whereas the trend in the data for the five previous years suggested an increase would have occurred. 

The research found that while only 47% of non-military credit unions experienced decreases in their portfolios for payday alternative loans (PALs) between the 4th quarter of 2015 and the 4th quarter of 2016, 86% of military credit unions experienced decreases in their portfolios for PALs during this same time period. 

CUNA also solicited data in March via an online survey of lending and compliance personnel. 

Based on responses from more than 600 credit union professionals, the survey found the MLA rule is proving burdensome to a majority of credit unions. Almost 60% of respondents stated that the MLA rule is either “very difficult” (15%) or “somewhat difficult” (43%) to comply with. 

In addition, roughly 60% of responding credit unions either “moderately” (32%) or “strongly” (27%) believe the MLA rule and accompanying MLA guidance is unclear and needs further clarification. 

CUNA and DCUC sent a letter to the DOD summarizing their findings and offering suggestions the agency can implement to reduce or eliminate the adverse impact the MLA rule is having.  

CUNA and DCUC believe the harm to servicemembers caused by the elimination of PALs can be mitigated by a complete exemption of PALs from the MLA rule. 

DOD has existing statutory authority to make the changes to the rule suggested in the letter, and CUNA and DCUC encouraged the agency to make the changes via an interim final rule, which would provide for a quicker rulemaking timeframe while also allowing DOD to accept input on the changes. The organizations requested DOD issue credit card guidance a minimum of 4 months prior to the effective date of that portion of the MLA rule, currently Oct. 3. If DOD is unable to issue guidance in this timeframe, CUNA and DCUC urged the department to delay the effective date of the credit card provisions to provide a period of at least 4 months between the date of issuance of the guidance and the effective date. 

The letter can be found here.  

About CUNA
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by more than 100 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit