On July 22, 2015, the Department of Defense (DOD) published new rules broadening the scope of current rules implementing the Military Lending Act (MLA). The amended rules significantly expand the scope of the MLA provisions by covering both new types of creditors and new credit products. For example, the new rules will cover many more types of closed-end loans, including, among other products, installment loans. Moreover, the new rules will also cover open-end lines of credit and credit cards for the first time. There are significant risks related to noncompliance, including potential civil liability and “voiding” of credit contracts; yet there remain critical ambiguities in the rule that may make compliance a guessing game for lenders. For example, the DOD provides little clarity with respect to whether certain fees must be included in the rate cap calculation and the meaning of “onerous” and “unreasonable” notice provisions.
The new rules become effective on October 1, 2015, with compliance required by October 3, 2016 for non-credit card products and by October of 2017, or possibly 2018, for credit cards. Please join us for a discussion on the DOD’s new MLA rules. Speakers will provide an overview of the new rules, which will cover: