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Members' input is due to NAFCU today on the Defense Department proposal to apply the Military Lending Act's 36-percent rate cap to more consumer credit products.

The proposed rule, detailed in a NAFCU Regulatory Alert to members, would apply to all credit unions. It would amend the rule's definition of "consumer credit" to more closely match the definition under the Truth in Lending Act, covering more credit products. The only credit products not covered by the proposed rule are residential mortgages and credit extended for secured personal property purchases or vehicle purchase loans secured by an interest in the vehicle.

DoD also proposes to require credit unions and other financial institutions to check a DoD administered database the to see if a borrower is covered by MLA when he or she opens an account or applies for consumer credit. Comments are due the Defense Department by Nov. 28. NAFCU is urging a 45-day extension.

NAFCU has worked extensively with DoD and CFPB on financial issues and rules affecting servicemembers, whom credit unions have a long history of serving. It has also urged NCUA to review its own rules on short-term, small-amount loans so federal credit unions are not blocked in the future from offering them because of MLA rule changes.

NAFCU will continue to work with stakeholders and to monitor this issue for its impact on servicemembers and credit unions serving them.