November 18, 2014

NAFCU, trades ask more time for DoD credit proposal

NAFCU and five other financial industry trades jointly asked the Defense Department Tuesday for a 45-day comment period extension on a proposed rule subjecting more credit products to DoD's 36 percent interest-rate cap.

The groups, which are also seeking a meeting with DoD officials to discuss the proposed rule, note that a 60-day comment period – the minimum required by executive order – likely isn't enough time to fully assess the proposed rule and its impact on lenders and servicemembers – indeed, all consumers, who could be left with fewer credit options. They add that the proposal raises "significant issues" for credit unions, banks, finance companies and DoD.

The proposal would have a "massive impact" on DoD's database, they noted, since virtually every applicant for consumer credit would have to be checked there.

Issued in September, the proposal would amend DoD's rules implementing the Military Lending Act. An advance notice of proposed rulemaking was issued last year, but Tuesday's letter notes the proposed rule is complex and makes "radical changes" to the earlier ANPR.

NAFCU also urged a 45-day extension in a letter last month from President and CEO Dan Berger. The current comment deadline is Nov. 28, the Friday after Thanksgiving Day.

Tuesday's letter was signed by NAFCU, American Financial Services Association, Consumer Bankers Association, American Bankers Association, Association of Military Banks of America and Independent Community Bankers of America.