WASHINGTON–Three credit union trade groups are welcoming a decision by the Department of Defense to drop what has been called a “problematic” question from its Military Lending Act guidance.
The DoD said it will revert to language for Question No. 2 in the MLA guidance to how it was initially written in 2016.
“We thank the Department of Defense for responding to CUNA’s concerns and recognizing our feedback,” said CUNA President/CEO Jim Nussle. “Credit unions still face a number of compliance burdens with the MLA regulation that are of concern, but we see this as a strong step in the right direction. CUNA will continue to work with the Department of Defense to evaluate where additional MLA compliance clarifications are necessary.”
CUNA said it has been engaged, along with the Defense Credit Union Council, on the issue for several years. Both CUNA and the DCUC said they have cited numerous conflicts and uncertainty it creates for credit unions that are struggling to comply with the DoD, Office of Management and Budget (OMB), and the Senate and House Armed Services Committees.
In a joint statement issued by NAFCU and the DCUC, “NAFCU and DCUC are committed to promoting the financial well-being of our nation’s servicemembers and their families. As a result of our joint advocacy, we appreciate the DoD reviewing Question 2, and reverting its guidance back to the original language adopted in 2016. While this is a good first step – as it provides more options for credit union members and some relief related to guaranteed asset protection (GAP) insurance – there is more work to be done for credit unions and their members. NAFCU and DCUC will continue to push for more guidance and revisions to the MLA rule, including its automobile exception and financing protocols.”