With many banks struggling to be ready for the Military Lending Act regulatory changes taking effect in October, Department of Defense officials signaled that the Pentagon is working on changes that would facilitate compliance. These would include signing the necessary contracts to allow lenders to verify borrowers’ military status through credit reports, as well as issuing an interpretive rule to address compliance concerns identified by the American Bankers Association earlier this year.
ABA today hosted a meeting with Diana Banks, the recently appointed deputy undersecretary of defense for personnel and readiness, as well as other DoD representatives, trade associations, banks and outside bank counsels to discuss the ongoing compliance concerns. Meeting participants also emphasized the need for an extension in the October compliance deadline given delays in rule clarification and database availability.
The final rule, issued last summer, expanded restrictions in the Military Lending Act to cover credit cards, lines of credit, installment loans and deposit advances offered to service members. It also required lenders to verify military or military dependent status for loan applications. For more information, contact ABA’s Nessa Feddis.