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Financial Institution Letters

FIL-37-2015
September 8, 2015

Final Rule: Military Lending Act

Printable Format:

FIL-37-2015 - PDF (PDF Help)

Summary:

The Department of Defense (DOD) issued a final rule amending the implementing regulations of the Military Lending Act of 2006 (MLA). The final rule expands specific protections provided to service members and their families under the MLA and addresses a wider range of credit products than the DOD's previous regulation. FDIC-supervised institutions and other creditors must comply with the rule for new covered transactions beginning October 3, 2016. For credit extended in a new credit card account under an open-end consumer credit plan, compliance is required beginning October 3, 2017.

Statement of Applicability to Institutions Under $1 Billion in Total Assets: This Financial Institution Letter applies to all FDIC-supervised financial institutions.

Highlights:

The final rule:

Continuation of FIL-37-2015

Distribution:

Suggested Routing:

Related Topics:

Attachment:

Contact:

Note:

FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at https://www.fdic.gov/news/news/financial/2015/.

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).

Financial Institution Letters
FIL-37-2015
September 8, 2015

Issuance of Final Rule Implementing the Military Lending Act

The Department of Defense (DOD) issued a final rule amending the implementing regulations of the Military Lending Act (MLA). Congress passed the MLA in 2006 to provide specific protections for active duty service members and their dependents in consumer credit transactions. The final rule amends the MLA regulation1 to expand specific protections provided to service members and their families and addresses a wider range of credit products that fell outside of the scope of the DOD's existing regulation.

The MLA caps the Military Annual Percentage Rate (MAPR) on covered transactions at 36 percent, requires disclosures to alert service members and their dependents of their rights, and prohibits creditors from requiring arbitration in the event of a dispute, among many other protections.

The final rule:

Link: Federal Register Notice http://www.gpo.gov/fdsys/pkg/FR-2015-07-22/pdf/2015-17480.pdf

1 32 CFR Part 232.

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