WASHINGTON, DC (August 25, 2016) — National Association of Federal Credit Unions (NAFCU) President and CEO Dan Berger issued the following statement in response to the Defense Department’s interpretive rule on its Military Lending Act (MLA) rule. It includes a NAFCU-sought clarification that the MLA will not prohibit the use of statutory lien authority by federal credit unions. The rule is scheduled to be published in the Federal Register tomorrow.
“NAFCU and our members have a solid history of serving our troops’ financial services needs,” said Berger. “We appreciate the Defense Department heeding some of our concerns regarding this rule, particularly relating to the lien authority, but many of our concerns remain unresolved. We will continue to advocate for our members and to carefully review the guidance to assess its full impact.”
NAFCU’s Regulatory Compliance team is studying the guidance and will update the association’s MLA Compliance Guide in advance of the effective date.
A credit union can use its own method to determine whether a member is a covered borrower under the rule, or it can use one of two safe-harbor methods: check the member’s status in the Defense Manpower Data Center database, or check it against data obtained from a consumer reporting agency.
The new MLA rule expands the number of products covered by MLA, meaning credit unions will have to revamp how they identify covered borrowers and services.
NAFCU’s extensive collection of MLA compliance resources is available online.
The National Association of Federally-Insured 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. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.
