Joint Trades Ask DoD For MLA Changes

On June 23, AFSA and several other trade associations sent a letter to the Department of Defense (DoD) on the regulations implementing the Military Lending Act (MLA). After thanking the DoD for its willingness to work with the trade associations and addressing many concerns, the letter stated that some confusion and inconsistencies remain. The associations wrote, “Together, this confusion and these inconsistencies make it likely that service members and their families might not have full access to safe and responsible credit options.”

The associations emphasized that they, “… share a desire to ensure responsible credit remains available to all military members and families and believe the Department can best achieve that goal by issuing an interim final rule for public comment that eliminates confusion and inconsistency in this area.”

Among other things, the letter asked the DoD to: (1) clarify that the exemption for purchase money loans (including vehicle purchase money loans) applies unless the borrower is receiving cash from the proceeds of the loan; thus, purchase money loans used to finance related items (extended car warranties, taxes) are exempt; (2) include recreational vehicles as “vehicles;” and (3) allow covered borrowers to use car titles as security for a loan if the loan terms are more favorable, such as a lower MAPR.