The New and Improved Military Lending Act
Congress and the Department of Defense (DOD) have enacted laws and regulations, particularly the Military Lending Act (MLA), that protect military personnel and their families from unscrupulous lenders and individuals who provide credit to them. While soldiers, sailors, and marines are trained for combat and military operations, relatively few have been schooled in dealing with predatory businesses who take advantage of those who wear the uniform, particularly regarding credit transactions. The DOD recently has issued a new and an updated version of the MLA that is intended to better protect our military personnel.
The updated MLA covers loans associated with paychecks, vehicle title transfers, refunds, money deposits, open-ended credit, credit cards, and more. For instance, it limits interest rates and fees for said types of loans, and it prohibits or limits hidden or additional costs for credit default plans, credit accessories, and the like. In addition, the MLA does not allow credit companies to require arbitration of disputes with soldiers, sailors, or marines; it also does not allow the refinancing of payday loans and prohibits creditors from requiring that military personnel use post-dated checks to acquire credit or obtain vehicle titles from banks or credit unions that are not properly licensed. Moreover, the new rule redefines and tightens the term credit as it pertains to closed-ended and open-ended loans; however, this redefinition does not apply to loans related to real estate or vehicle purchases.
The updated MLA protects military personnel who use credit or loans mainly for personal or family purposes. While the MLA now covers credit cards, it does not cover certain credit card fees that are considered reasonable and standard for those kinds of fees. Thus, the rule still permits credit card providers to send cardholders interest rates that are no more than 36 percent and other reasonable charges associated with particular goods or services. The new rule also allows creditors two months to use the DOD’s MLA database or nationwide credit reporting companies to double-check borrowers’ standing and to abide by mandates for keeping records.
Significantly, the new rule stipulates that creditors must be clear and upfront with borrowers about what exactly is expected of them in terms of repayment and the like. The new rule also provides a remedy in court for military personnel: It contains new clauses that enable borrowers to obtain damages from creditors who violate the MLA.
In short, the updated MLA limits the interest rates that military personnel can be charged and increases the number of options for military personnel to protect themselves and their families from predatory companies. As a result, the law gives military personnel the ability to fight back against those who would take advantage of them here in the United States. The law recognizes the sacrifices that military personnel make in living far from home and risking their lives for all of us. The law, however, has limits: For instance, it seems not to apply to reserve or retired military personnel and their families.
If you are a resident of Clarksville, Tennessee or nearby Fort Campbell, you may especially feel the effects of the new rule, as the updated MLA is intended to keep predatory lenders from abusing you in business transactions.
If you have questions about this law (the MLA) or your rights, talk to a lawyer. If you feel that an unscrupulous lender is taking advantage of you, do not fret. There are legal remedies available. For more information, contact Nashville Attorney Perry A. Craft.
Perry A. Craft has dedicated his life to helping people in need. He has tried, settled, or resolved numerous civil and criminal cases in State and Federal courts, and has represented teachers and administrators before school boards, administrative judges, and the state Board of Education. Learn more about Attorney Craft.