WASHINGTON–The Department of Defense (DoD) has released guidance on changes to the Military Lending Act (MLA).
While it includes some clarifications that had been requested earlier by credit unions, CUNA said the guidance still does not go far enough.
On the positive side, CUNA said the one important clarification is that the new MLA rules do not ban the use of statutory lien authority for credit unions. Another positive, said CUNA, is that lenders need only present the payment portion of the loan document during a verbal or written disclosure, not the entire document as the final rule seemed to suggest.
But in a conference call with the media, Mike McLain, CUNA’s senior federal compliance counsel, said unanswered questions that remain include what constitutes an ancillary product, which means interpretation is required of what must be included in APR calculations to remain under the 36% APR ceiling set by the MLA.
"The guidance puts a lot of focus on credit card accounts, and those provisions don't go into effect until October 2017--or later if delayed by the DOD beyond 2017. It would have been preferable for the department to focus more tightly on the rules that go into effect in just five weeks," McLain said in a statement released by CUNA.