Lending to Servicemembers - MLA and SCRA

Question 1

Which types of loans are covered under the MLA?

Answer 1

Consumer credit for personal family or household purposes

Question 2

Which charges and fees are included in the MAPR?

How is the MAPR disclosed?

Answer 2

any credit insurance
debt cancellation
gap
finance charges
application fees
participation fees

Question 3

What are the MLA disclosure requirements?

Specifically, which MLA disclosures must be written and which disclosures must be given orally?

Answer 3

Statement of the MAPR
Reg Z

written must be something that the member can keep

oral: clear description of the payment obligation - minimum payment calculation; payment obligations for monthly/weekly payments

Question 4

What is a covered borrower under the MLA?

Is there a difference between who can be a covered borrower under the MLA and which servicemembers receive protection under the SCRA?

Answer 4

MLA covers loans
SCRA is for loans/cc during active duty that were in place prior to active duty

MLA is for loans take out during active duty

Question 5

How can a credit union determine someone’s MLA covered borrower status in a legally conclusive way to benefit from the rule’s sae harbor?

Answer 5

MLA database
Dept of Defense database

Question 6

What is the SCRA’s interest rate cap?

When does the CU have to apply the cap?

Are late fees included in the calculation of the interest rate cap?

Can the CU collect the foregone interest at a later time?

Are there potential differences in treatment between open-end and closed-end credit?

Answer 6

6%
enter active duty service
yes
no
no

Question 7

How does the SCRA interest rate cap apply for credit card accounts?

Question 8

What are the SCRA’s limitations on repossessing vehicles and mortgage foreclosures?

Answer 8

cannot foreclose
cannot repossess