Press

NAFCU statement on DoD Final Military Lending Act Rule

WASHINGTON, D.C. (July 21, 2015) — National Association of Federal Credit Unions (NAFCU) issued the following statement in response to the Defense Department’s finalized Military Lending Act (MLA) rule, which includes NAFCU-sought concessions for credit union payday alternative loans (PALS), as well as how credit unions can provide requisite disclosures.

“We have always supported protecting the troops from predatory lenders. We appreciate DoD taking a measured approach with the final rule,” said NAFCU Military Liaison Quincy Enoch. “While NAFCU appreciates that DoD heeded many of our concerns and took steps in this final rulemaking to limit the impact on credit unions, we are still carefully reviewing it to assess its full impact on our members. Credit unions have a long track record of providing much needed financial services to the troops, and NAFCU believes that regulators should be cautious of burdening this relationship.”

The final rule makes important NAFCU-sought modifications to how a credit union can meet its disclosure requirements under MLA. Specifically, the final rule allows a credit union to list a toll-free telephone number on all consumer credit applications to satisfy oral disclosures requirements.

The final rule, set to become effective on Oct. 1, will define covered “consumer credit” to include virtually all unsecured lending, subjecting these loans to the military annual percentage rate (MAPR) limit. MAPR will include charges for most “add-on” products so predatory lenders cannot impose extra fees.

The National Association of Federal Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. www.nafcu.org.

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