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The NCUA said it is aware of and engaged with the Department of Defense (DoD) regarding credit unions' compliance challenges associated with the DoD's explanation of guaranteed acceptance protection (GAP) insurance housed within the Military Lending Act (MLA) rule in a response letter to NAFCU and the Defense Credit Union Council (DCUC) last week.

The NCUA's letter, from Executive Director Mark Treichel, was in response to letter sent to the DoD and NCUA in January from NAFCU and the DCUC on the issues caused by question-and-answer No. 2 from the DoD's 2016 interpretive rule amendments. The groups asked that the DoD rescind the question from its interpretive rule and the subsequent amendments due to the confusion it has created for credit unions and their third-party vendors. The letter to the NCUA asked that the agency also urge the DoD to rescind question No. 2.

The NCUA said its management team from the Office of Consumer Financial Protection has been "actively engaged in interagency consultations with the Department on this matter as recently as last month." The letter confirms that the DoD is aware of the issues from question No. 2.

NAFCU will continue to push for more clarity in the form of guidance or revisions to the MLA rule. NAFCU has a host of MLA resources available here and will soon release an updated version of its Military Lending Act Guide taking into account these revised interpretations.