A pawnshop chain is asking a federal judge to delay implementation of new Pentagon rules enforcing the Military Lending Act.

Huntco Pawn Holdings, a chain that operates shops in Illinois, Iowa and Missouri, filed suit in the U.S. District Court for the District of Columbia, charging the Department of Defense failed to take into account the impact the rules would have on small businesses, such as pawn shops.

Credit unions also have expressed concern about the impact of the rule, which places a verification burden on them.

Changes to the MLA were finalized last year; they added several protections on loans to military service members. Loans to borrowers cannot exceed a 36% military annual percentage rate.

Pawn shops previously were not subject to the MLA, Huntco stated in the suit. Beginning Oct. 3, however, pawn shops would be subject to civil and criminal liability if they make a loan with an interest rate that exceeds the MLA limit.

Under the new rules, the shops would be required to verify an applicant’s military status. That would require a computer, which many pawnshops do not have, Huntco contends in the suit.

The company wants the Department of Defense’s rule vacated until the Pentagon adequately demonstrates that it has taken into account the impact they would have on pawn shops.

CUNA has said it is concerned with many changes to the MLA. It said it is strongly opposed to changes that would require creditors to check to see whether a consumer is a covered borrower.

At the DOD’s request, CUNA submitted guidance suggestions.  The association said it is particularly concerned that the Pentagon has not released a compliance guide for the new rules.