Removing Barriers Blog

BCFP Considering Stop to MLA Examinations
Posted August 14, 2018 by Chandler Schuette

It’s been widely reported that the BCFP is considering ending examination activities related to the Military Lending Act (MLA).  This policy shift is proposed in an internal memo arguing that the Bureau does not currently have the authority to conduct such examinations. 

Acting Director Mulvaney has maintained on several occasions that the Bureau should aim to limit its authority to situations where such authority has been clearly provided by Congress.  In this case, the Dodd-Frank Act provides the BCFP with the authority to conduct examinations related to provisions in Dodd-Frank and other “enumerated consumer laws.” However, the MLA does not appear on the list of enumerated laws in Dodd-Frank. 

While – based on the memo’s reasoning – the BCFP may not have the authority to examine for MLA compliance, the Bureau does have the authority to enforce the MLA.  Such authority being provided in the MLA itself, which permits the BCFP to enforce the MLA against entities subject to its TILA enforcement.

It remains to be seen how the Bureau would implement this policy change in a manner that allows for continued enforcement of the MLA.  CUNA will keep credit unions updated on changes to BCFP examinations.  In the meantime, we will continue to advocate for the Department of Defense to make additional changes to the MLA rule and interpretive guidance, including the withdraw of Question #2, so that credit unions are able to continue providing servicemembers with unhindered access to high-quality financial services.