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Joint CUNA Letter Asks that CUs Be Exempt from MLA Proposal
Tuesday, December 30, 2014 6:35 AM

A revamped Military Lending Act (MLA) could negatively affect the delivery of high-quality, reasonably priced financial products to servicemembers, reads a joint letter from credit union stakeholders:  Credit Union National Association, African-American Credit Union Coalition, Defense Credit Union Council, National Association of Federal Credit Unions, and the National Association of State Credit Union Supervisors.

The joint letter addresses the Department of Defense (DOD) proposal to place a 36 percent cap on the military annual percentage rate of interest for credit products, as well as other protections.

The letter reads, "Any changes to the current rules should curtail and eliminate the unscrupulous business practices of organizations targeting our military personnel—and not harm credit unions that are dedicated to the financial well-being of their member-owners."

It goes on to strongly urge the DOD to exempt credit unions completely from the proposed changes, including new coverage under an expanded definition of "consumer credit," which would apply to certain open-end credit products. In this case, credit unions would remain covered by the existing MLA rule.

Credit unions support further efforts to educate servicemembers, the letter concludes, and the DOD is encouraged to collaborate with entities such as the CFPB. The letter pledges credit union assistance for financial education outreach at the national and local levels.