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CUNA Publishes Analysis of MLA Final Rule
Tuesday, August 11, 2015 6:35 AM

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 Removing Barriers blog.

The changes to the Military Lending Act (MLA) were finalized July 22, will become effective Oct. 1, and compliance will become mandatory on Oct. 3, 2016.

“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,” the blog reads. “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.”

The rule also includes a new method of calculating military annual percentage rate (APR), which has changed from the APR calculation in Regulation Z. MAPR must include any credit insurance premiums and fees for debt cancellation or suspension agreements, as well as fees for credit-related ancillary products.

The final rule provides a limited exclusion from the MAPR for application fees. In calculating the MAPR for credit card accounts, the rule excludes “bona fide” fees, such as application fees, annual fees, and cash advance fees.