On October 3, 2016, new Military Lending Act (MLA) protections went into effect. The updates to the MLA include a wide range of credit products that were not previously covered under the act, providing new protections to active-duty personnel and their spouse and dependents. These protections include:
- Limiting APR to 36%
- Military-specific disclosures
- A prohibition against required arbitration for disputes
If you provide the following services, these updates to the MLA apply to you:
- Certain payday loans
- Vehicle title loans
- Tax Refund Anticipation Loans (RALs)
- Deposit advance loans
- Unsecured open-end lines of credit
- Credit Cards (effective October, 2017)
To ensure that you are providing the proper protections to active-duty military personnel, it is essential that you verify active-duty military status based on the information provided by the Department of Defense (DoD) on every loan application you process. Performing this one vital step will allow you to satisfy the safe harbor provision of the MLA.
CoreLogic Teletrack offers real-time verification of active-duty military status directly from the DoD, available as an add-on to every inquiry request. You will get a “Covered” or “Not Covered” response based on information from the DoD, so you can maintain MLA compliance and meet the Safe Harbor provision.