ABA Banking Journal
The American Bankers Association and several financial trade associations today wrote to the heads of the federal regulatory agencies raising concerns about the fast-approaching compliance deadline for changes to the Department of Defense’s Military Lending Act rule. The amendments — which extend MLA restrictions to cover credit cards, lines of credit, installment loans and deposit advances offered to service members and their dependents — take effect Oct. 3.
ABA aggressively lobbied the Pentagon for clarification on several elements of the changes, which resulted in an interpretive rule being published Aug. 26. Given the short time frame between this clarification and the implementation deadline (and the severe penalties for lack of full compliance), the groups urged regulators to provide banks with a six-month window to ensure that systems are properly implemented and tested before they are subject to transactional testing for compliance during exams. They added that the DoD has also experienced significant delays in creating a system for providing lenders with military status information, which will leave banks unable to finalize and test their compliance programs until mid-September.
ABA continues to work with the DoD and regulators to ensure that the changes to the rule are implemented with minimal imposition on customer service. To help bankers comply with the changes, ABA has updated its staff analysis on the MLA to reflect last week’s interpretive rule. For more information, contact ABA’s Nessa Feddis.