Department of Defense Issues Interpretive Rule Amendment Under the Military Lending Act, Limitations on Terms of Consumer Credit Extended to Service Members and Dependents

The Department of Defense announced today that an Interpretive Rule Amendment under the Military Lending Act (MLA) Limitations on Terms of Consumer Credit Extended to service members and dependents, was published today in the Federal Register. The interpretive rule amendment provides additional guidance on questions the Department received regarding compliance with the July 2015 Final Rule.

The MLA provides improved protection from predatory credit practices for service members by expanding financial protections provided, and helping ensure military families receive the consumer protections they deserve. The MLA, as implemented by the Department, limits the military annual percentage rate that a creditor may charge to a maximum of 36-percent, requires specific disclosures, and provides additional substantive consumer protections on “consumer credit” extended to service members and their families.

On July 22, 2015, the Department amended its MLA regulation, primarily for the purpose of extending the protections of the MLA to a broader range of closed-end and open-end credit products (the July 2015 Final Rule).

Following publication of the July 2015 Final Rule, the Department received requests to clarify its interpretation of specific points raised in the rule. In response, the Department issued the first set of interpretations of the July 2015 Final Rule in the form of questions and answers on August 26, 2016. The Interpretive Rule Amendment adds to the previous questions and answers, to provide additional guidance on questions the Department has received, regarding compliance with the July 2015 Final Rule.

The new interpretive rule is accessible though Docket ID: DOD-2017-OS-0038, RIN 0790-ZA13.