Military Lending

Impact

The Department of Defense's (DoD) amendments to its Military Lending Act (MLA) regulation limits the amount of interest that a creditor may charge on “consumer credit” to an APR (referred to as a Military APR, or MAPR) of 36%. The final rule amends “consumer credit” to extend the definition to a much broader range of closed-end and open-end credit products. Previously, “consumer credit” was limited to three categories of products: payday loans, vehicle title loans, and refund anticipation loans.​

Requirements relating to the calculation of the MAPR for a credit card account went into effect on October 3, 2017. In December 2017, DoD released guidance CUNA had been urging for. Unfortunately, the guidance falls short of addressing many of the concerns CUNA has raised with DoD regarding the final rule. We will continue to pursue clarification on Question & Answer #2, which negatively impacts credit unions and CUNA has request the DoD rescind that provision of the guidance.

Where We Stand

CUNA has highlighted a number of areas to the DoD where servicemembers have been harmed by unintended consequences from MLA rules. Members of Congress have also weighed in with DoD with concerns about safe credit being limited because of the unclear requirements under MLA amendments. CUNA is urging the DoD to remove Question & Answer #2 of the December 2017 Interpretive Rule. We are also continuing to seek other clarifications. 

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