CUs Avoid New Restrictions in Defense Bill
Congress passed the National Defense Authorization Act on Dec. 21 without including a provision that would have expanded Military Lending Act rules and made it more difficult for credit unions to provide certain products to military families.
The Military Lending Act, passed in 2006, capped interest rates on payday, auto title and tax refund anticipation loans made by predatory lenders to military families at 36% APR.
NAFCU, whose members include many credit unions that serve the military, said a House-Senate conference panel approved a compromise Dec. 18 that prevented a broadening in scope of MLA rules.
While the expanded rules would have made some products more difficult for credit unions to provide, the conferees did retain language that adds civil liability to the list of MLA penalties. Congress also included language in the bill that gives MLA enforcement authority to the CFPB and NCUA.
The Senate approved the bill by a vote of 81-14. Because it has already passed the House, the bill now sits on President Barack Obama’s desk, waiting to be signed into law.
NAFCU, which lobbied on the bill, said it will work closely with the Department of Defense on any changes enacted that affect credit unions.