On December 30, 2021 the Consumer Financial Protection Bureau (CFPB) issued a consent order with Omni Financial (Omni) for violations of the Military Lending Act (MLA) and the Electronic Funds Transfer Act. This is the second such action in recent weeks, as we blogged about here, which is in line with the bureau’s statement that it is investigating other MLA violations.
Under the MLA, someone is a covered borrower if they are an active member of the military, or a dependent of such person, at the time of becoming obligated on most consumer loans. There are exceptions for some products, such as motor vehicle purchase loans and residential loans. When a loan within the scope of the MLA is made to a covered borrower, there are, among other things, disclosure requirements, a 36% Military Annual Percentage Rate (MAPR) cap on the loan and specific contractual limitations such as:
- A prohibition against arbitration clauses;
- Restriction against requiring repayment by allotment;
continue reading »