Removing Barriers Blog

CUNA & DCUC Send Letter to DoD on MLA Regulation
Posted May 11, 2017 by vgawali

Today, CUNA and the Defense Credit Union Council (DCUC) sent a letter to the Acting Director of Financial Readiness of the U.S. Department of Defense in regards to the impact of the Military Lending Act Regulations on credit union lending.   

The letter shares relevant findings from CUNA and DCUC’s data collection and offers suggestions the Department could implement to reduce or eliminate the adverse impact the MLA rule is having on servicemembers and their dependents.  This communication also served as a follow-up to a letter sent to the DoD earlier this year. 

Highlights of the letter include: 

  • CUNA’s MLA survey results 
  • Request for guidance on credit card provisions of MLA rule 
  • How the rule is adversely affecting servicemembers ability to access: 
    • Share-Secured Loans 
    • Vehicle Loans 
    • Payday Alternative Loans 
    • Overdraft Protection Lines of Credit 

Unfortunately, based on CUNA’s review of the impact of the MLA rule, the call report data and survey results suggest that some credit unions have been forced to reduce or eliminate certain loan products previously utilized by servicemembers. Further, many of these servicemembers are forced to borrow elsewhere at higher costs. Instead of being able to turn to their credit union, which is likely one of their safest and most affordable options for credit, servicemembers may end up turning to illegal online and offshore, or other predatory lenders. 

CUNA will continue to press the DoD for clarification on and amendments to the MLA rule to make it easier for credit unions to comply with.