Thursday, June 29, 2017

Financial Trades Urge DOD to Clarify MLA Rules, Extend Credit Card Compliance Date

Seven financial trade groups wrote to the Department of Defense (DOD) on June 21 urging the department to take additional steps to clarify inconsistencies and confusion that still surround the amended Military Lending Act (MLA) rules and a subsequent interpretive rule issued by DOD. The financial trade associations added that changes are necessary to ensure military personnel and their families have access to safe and responsible credit products.

The groups encouraged DOD to issue an interim final rule that would address lingering problems with the rule, and provided detailed comments and suggested regulatory language. They added that the rule was never intended to apply to mainstream loans, but rather, to payday loans, title loans and tax refund anticipation loans.

Among the recommended changes were clarification that the exemption for purchase money loans includes loans that are used not only to purchase the item securing the loan but also to purchase related items, such as extended warranties on a car. In addition, the associations recommended exempting credit cards from the rule, noting the requirements are unworkable; for example, it is not possible to discern which fees are “bona fide” and thus excludable from the military annual percentage rate.

The group also asked DOD to extend the mandatory compliance date for credit card accounts to October 3, 2018. This extension in the compliance date would allow time for changes in the regulation.

The letter was signed by the American Bankers Association, the American Financial Service Association, the Association of Military Banks of America, the Consumer Bankers Association, Credit Union National Association, the Independent Community Bankers of America, and National Association of Federally-Insured Credit Unions.

Read the letter.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.