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NAFCU Director of Regulatory Affairs Alexander Monterrubio on Tuesday highlighted a number of credit card-specific Military Lending Act issues and urged the Defense Department to provide a one-year extension, to at least Oct. 3, 2018, to the rule's credit card compliance deadline.

Unlike other consumer credit products, credit cards have multi-dimensional pricing structures which include various fees and periodic rates, as well as other features such as rewards and benefits that must be taken into consideration when updating core systems and policies to bring them into compliance with the MLA rule.

"As the implementation deadline for all other covered loans draws near, our members continue to grapple with the challenges of the rule as it applies to products that have pricing structures far less complicated than traditional, mainstream credit card accounts," Monterrubio wrote. "Credit unions expect the process for credit cards to be even more unwieldy."

He noted the challenges involved in meeting the current deadline of Oct. 3, 2017. Specifically, due to the complexity of calculating a military annual percentage rate (MAPR) for each billing cycle, credit unions could inadvertently trigger the 36-percent MAPR cap and be required to re-credit fees or premiums under the MLA rule.

Explaining the cumbersome methodology DoD has chosen to use for calculating the MAPR for open-end consumer credit plans, Monterrubio said credit unions and their vendors will be required to make substantial changes to existing systems or adopt new systems. These systems will need to "track not only the typical pricing features of credit cards but compare those to the outstanding monthly balance to then calculate an effective monthly MAPR," he explained.