WASHINGTON–CUNA has completed an analysis of the U.S. Department of Defense’s (DOD) final rule regarding military lending, and published the results on its blog, Removing Barriers.
The analysis follows the finalization of rules related to the Military Lending Act, which goes into effect Oct. 1, with compliance mandatory by Oct. 3.
“Under the final rule, DOD expands the scope of the MLA regulation by aligning its scope with that of the Truth in Lending Act and Regulation Z; as amended, ‘consumer credit’ covered under the MLA is now generally consistent with credit covered by Regulation Z,” CUNA said in its analysis. “Thus, a wide range of credit transactions that are subject to Regulation Z—including open-end credit and installment loans—are now also subject to the MLA regulation for the first time. However, the final rule does not apply to residential mortgage loans, secured motor vehicle and personal property loans, and transactions not covered by Regulation Z.”
Among the changes to which credit unions need to pay attention are a new method for calculating APR. There is also a limited exclusion from the military APR for application fees.