Democrats push for MLA expansion
August 19, 2013 – Twenty-three Democratic senators wrote Defense Secretary Chuck Hagel last week to raise concerns about predatory lenders that target servicemembers and to ask that loopholes in the Military Lending Act be addressed.
Sen. Mazie Hirono, D-Hawaii, a member of the Senate Armed Services Committee, said, “Given the many sacrifices military families make, it is deeply disturbing that predatory lenders would target them with exploitative financial schemes.”
The senators wrote that “due to the narrow definition of consumer credit” in MLA rules, “certain lenders are offering predatory loan products to service members at exorbitant triple digit effective interest rates and loan products that do not include the additional protections envisioned by the law.” The lawmakers encouraged the Defense Department to update the definition of consumer credit and to extend the 36 percent annual percentage rate cap to unsecured installment loans made to servicemembers and their families.
Among the other lawmakers who signed the letter were Sens. Dick Durbin, Ill., Elizabeth Warren, Mass., Al Franken, Minn., Mark Warner, Va., and Tammy Baldwin, Wis. NAFCU continues to work with the Defense Department on this issue.
Text of letter