House Members Ask for MLA Exemption for CUs
A group of bipartisan House members is asking the Department of Defense to exempt credit unions and other highly regulated financial institutions from Military Lending Act rules issued in recent years.
In the letter, the six lawmakers, led by Rep. Paul Cooke (R-Calif.) said that the rules, issued as a result of an updated MLA are leading “good actors” to stop offering services to servicemembers.
The House members specifically mentioned new credit card rules that are scheduled to become effective next month. Since the DoD has not issued guidance on how financial institutions can comply with the regulations, the rules should be delayed, they said.
“Of great concern, I have heard from credit unions that they are being forced to cut back on, or eliminate products that help find solutions for servicemembers and their families that may have few, or much worse alternative products,” the lawmakers wrote.
If the Pentagon believes that it cannot exempt credit unions from the MLA rules, DoD officials should seek ways to limit the impact on credit unions and other highly regulated institutions, they said.
Credit union trade groups were pleased with the lawmakers’ letter.
“We’ve been seeking guidance from the DoD on these MLA changes for many months now,” said Jared Ihrig, CUNA’s chief compliance officer. “Credit unions deserve unambiguous guidance on how they can continue service to servicemembers and their families without running afoul of the MLA.”
Ihrig said that DoD said that new MLA guidance will not cover credit cards, a particular concern for credit unions.
"CUNA has worked extensively with Congress and DoD for an outright exemption, and, short of that, guidance to help ensure credit union compliance with the rule,” said CUNA President/CEO Jim Nussle."
And NAFCU President/CEO B. Dan Berger said, “Our members need relief in order to provide services to our country's military community who deserve every opportunity to live their American Dream."
In addition to Cooke, the letter is signed by Reps. Marcy Kaptur (D-Ohio), Tim Ryan (D-Ohio), Thomas Garrett (R-Va.), Tom O’Halleren D-Ariz.) and Jackie Speier (D-Calif.)