The Department of Defense (DOD) has issued establishing new requirements for most non-mortgage related consumer credit transactions (Final Rule). 1 The Final Rule amends the regulation DOD promulgated under the part of the John Warner National Defense Authorization Act for Fiscal Year 2007 called the вЂњMilitary Lending ActвЂќ (MLA). 2 The Final Rule expands coverage of the current regulation to include many non-mortgage related credit transactions covered by the Truth in Lending Act (TILA), 3 as implemented by Regulation Z. 4 It provides safe harbor methods for identifying borrowers covered by the Final Rule, prohibits the use of certain practices, and amends the content of the required disclosures if your credit union provides consumer credit to active duty Service members, their family members or dependents, you likely will have to comply with a final rule. The ultimate Rule also includes provisions that are new administrative enforcement, charges and treatments.
The goal of this document would be to alert you of this amendments to your MLA regulation to help you do something to make sure conformity aided by the last Rule. The last Rule has various effective times and conformity times for certain conditions, as discussed within the Effective Dates element of this document. 5
Initially, the MLA as well as its applying legislation only applied to high-cost pay day loans, automobile title loans and reimbursement anticipation loans involving covered borrowers. To more effectively provide the protections designed to be afforded to provider users and their dependents, DOD amended its legislation mainly to give the defenses associated with the MLA to a wider variety of closed-end and credit that is open-end. The ultimate Rule expands protection to incorporate many non-mortgage consumer that is related deals included in TILA and Regulation Z, including charge card reports and payday alternative loans (PALs) federal credit unions make under NCUAвЂ™s regulation. (See Covered Transactions area in this document.)