With recent changes to the Military Lending Act rules set to take effect in October, the Department of Defense is issuing an interpretive rule clarifying several elements of the changes. ABA strongly advocated for further clarifications to facilitate compliance with minimal imposition on customer service.
The interpretive rule clarifies that banks may continue to provide credit secured by a bank account to military personnel and their spouses and dependents and that they may provide generic oral disclosures about payment obligations, rather than the specific payment obligation of the individual borrower. The rule also clarifies that the banks may rely on information about military status that is obtained through DoD or a credit bureau up until the time the account is opened.
Compliance with the MLA changes -- which extend MLA restrictions to cover credit cards, lines of credit, installment loans and deposit advances offered to service members and their dependents -- remains mandatory on Oct. 3.