WASHINGTON — The comment period on the Department of Defense's anti-predatory lending regulation has come to a close and credit union organizations, while supporting its intent offered a plethora of recommendations for improvement.
NAFCU stated that credit unions are not part of the problem, but carve out for federally regulated financial institutions is not necessary either at this time. The group noted that the regulation was sufficiently narrow, but that any loans in compliance with the Federal Credit Union Act and NCUA's regulations should not be covered. NASCUS added that if such a carve out is implemented, state regulated institutions should also get a carve out.
To simplify things, four credit union associations recommended that the Reg Z definition of APR be adopted rather than creating the new Military Annual Percentage Rate. If not, CUNA and the Defense Credit Union Council said, "We would also appreciate clarification regarding the fees included in the MAPR…We request clarification with the final rule to indicate that no fee would be included if it is not financed, deducted from the credit, or otherwise required."
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NASCUS and NAFCU also asked that an unqualified "safe harbor" in determining coverage should be in the DoD reg. "The bottom line is that a creditor is subject to fines or even jail for potential inaccuracies and the control mechanisms are not necessarily within his control," NASCUS wrote.
All four recommended a longer period for compliance as well.
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