ALEXANDRIA, Va.—The NCUA said has engaged with the Department of Defense related to compliance challenges faced by credit unions associated with the DoD's explanation of guaranteed acceptance protection (GAP) insurance housed within the Military Lending Act (MLA) rule.
In a letter to NAFCU and the Defense Credit Union Council, the DoD addressed issues caused by question-and-answer No. 2 from the DoD's 2016 interpretive rule amendments.
The groups asked that the DoD rescind the question from its interpretive rule and the subsequent amendments due to the confusion it has created for credit unions and their third-party vendors. The letter to the NCUA asked that the agency also urge the DoD to rescind question No. 2.
The NCUA, in a letter from Executive Director Mark Treichel, said the agency’s Office of Consumer Financial Protection has been "actively engaged in interagency consultations with the Department on this matter as recently as February. The letter confirms that the DoD is aware of the issues from question No. 2, NAFCU said.
NAFCU said it will continue to push for more clarity in the form of guidance or revisions to the MLA rule.