Bureau reportedly stepping away from MLA oversight

The Bureau of Consumer Financial Protection (previously the CFPB) will reportedly not examine financial institutions for compliance with the Department of Defense’s (DoD) Military Lending Act (MLA) rule. This rule has posed many compliance challenges to credit unions and NAFCU has continued to push for clarity in the form of guidance or revisions.

The New York Times last week reported, based on internal agency documents, that bureau Acting Director Mick Mulvaney plans to “scrap the use of so-called supervisory examinations of lenders” on the basis that the legislation does not specify such oversight by the bureau.

The MLA rule was amended in July 2015. The amendments vastly expanded the number and types of products that are subject to the MLA, applied a maximum 36 percent Military Annual Percentage Rate and required additional written and oral disclosures to virtually all unsecured credit.

NAFCU was able to secure some key changes in the final rule to help mitigate the impact of the regulation, but is continuing to push for more. Most recently, NAFCU and the Defense Credit Union Council (DCUC) told the DoD of the compliance challenges associated with its treatment of auto loans that finance products like guaranteed acceptance protection (GAP) insurance.


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