Credit union and banking groups appealed on Wednesday to a federal interagency regulatory panel for a six-month delay in enforcing new rules designed to protect service members from predatory lenders.
Last week officials with CUNA and the American Bankers Association said they were still confused by the rules, scheduled to take effect Oct. 3, even as the Department of Defense issued clarifications. On Tuesday CUNA asked DoD for a six-month delay, and on Wednesday CUNA joined with five other associations making a similar request to the Federal Financial Institutions Examination Council.
Mainstream banks and credit unions were not the target of Military Lending Act rules that were announced in July 2015. Instead, the rules were designed to stop payday lenders, title loan lenders and other that targeted cash-strapped service members and their families with loans with exorbitant interest rates that were easy to get and difficult to escape.
The three-page letter to FFIEC members urges them to give lenders an extra six months to implement and test their MLA compliance systems.
“We believe that this approach is not only fair and practical, but will help to ensure that military personnel, their spouses and dependents continue to have access to depository institution credit products they need and value. Depository institutions are more likely to continue to make loans available to covered borrowers if they have assurances that supervisory review will reflect consideration of these factors,” the letter says.
Besides CUNA, the other signers were the American Bankers Association, the Consumer Bankers Association, the Independent Community Bankers of America, the Association of Military Banks of America, and the National Association of Federal Credit Unions.
