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At the request of NAFCU and others, the Department of Defense is extending its comment period on proposed Military Lending Act rule changes – which would apply to all credit unions – for 30 days following the official notice scheduled for publication in today's Federal Register.

"This rule will affect every credit union no matter how many servicemembers are in your field of membership or at what interest rate your consumer credit products are offered," NAFCU Military Liaison Quincy Enoch said. "Every time any credit union extends a member any consumer credit product, they will need to check the Defense Manpower Data Center (DMDC) database to see whether the member is a servicemember or a dependent of one to ensure the credit union provides the proper disclosures to avoid penalties. Penalties could include enforcement actions from CFPB or a criminal penalty, including up to a year in jail."

In a blog post on the NAFCU Compliance Blog last week, Enoch further explains the requirements of this proposal.

Last week, NAFCU and five other financial industry trades jointly asked DoD for a 45-day comment period extension and for a meeting on the proposal, which would subject more credit products to DoD's 36 percent interest-rate cap. Meanwhile, NCUA Board Chairman Debbie Matz says her agency plans to "submit formal comments" on the proposal.

Issued in September, the proposal would amend DoD rules implementing the Military Lending Act. An advance notice of proposed rulemaking was issued last year, but last week's joint-trades letter notes the proposed rule is complex and makes "radical changes" to the earlier ANPR. NAFCU President and CEO Dan Berger also urged a 45-day extension in a letter last month.

For any questions regarding this proposed rule, contact Enoch at qenoch@nafcu.org or (703) 842-2261.