Military Lending Act Limitations on Terms of Consumer Credit Extended to Service Members and Dependents

In July 2015, the DOD issued a final rule amending its regulation implementing the Military Lending Act (MLA)  primarily for the purpose of extending the protections of the MLA to a broader range of closed-end and open-end credit products, rather than the limited credit products that had been defined as “consumer credit.”  Among other amendments, the July 2015 Final Rule modified provisions relating to the optional mechanism a creditor may use when assessing whether a consumer is a “covered borrower,” modified the disclosures that a creditor must provide to a covered borrower and implemented the enforcement provisions of the MLA.

The DOD has received requests to clarify its interpretation of points from the July 2015 Final Rule with an Interpretive Rules issued August 2016 and December 2017.   The February 2020  Interpretive Rule amends and seeks to answer the following questions: