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Later this year, the Department of Defense’s revisions to the Military Lending Act (“MLA”) will take effect. As we get closer to the effective date of October 3rd be sure to stay tuned to The Works Blog. We’ll be going into much more detail about what these changes will mean for your credit union. However, due to an impending deadline related to MLA compliance we need to take a moment to touch on it now.

Under the MLA, covered members and their dependents are entitled to certain protections. For example, a covered member may not be charged a Military Annual Percentage Rate (“MAPR”) in excess of 36% on certain consumer credit transactions. The MAPR is inclusive of not only interest, but also: application fees, fees for credit insurance, etc.

Currently, to determine a borrower’s eligibility for MLA relief your cooperative simply asks the member to sign a Covered Borrower Identification Statement. You may continue to use this method until October 3rd. However, for safe harbor compliance after the effective date your credit union must use one of the following new identification methods:

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