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The Military Lending Act (MLA), enacted in 2006 and implemented by the Department of Defense (DoD), protects active duty members of the military, their spouses, and their dependents from certain lending practices. These practices could pose risks for servicemembers and their families, and could pose a threat to military readiness and affect servicemember retention. In 2015, the Department of Defense (DoD) expanded by rule the types of credit products that are covered by the MLA.
The DoD regulation implementing the MLA contains limitations on and requirements for certain types of consumer credit extended to active duty servicemembers and their spouses, children, and certain other dependents (“covered borrowers”). Subject to certain exceptions, the regulation generally applies to persons who meet the definition of a creditor in Regulation Z and are engaged in the business of extending such credit, as well as their assignees.
The use of flowcharts facilitates the determination of whether certain regulatory requirements apply to a particular transaction. The MLA Coverage Flowchart is a tool to easily determine if a consumer credit is covered by MLA. The flowchart includes a step-by-step process of considering each trigger and exception for coverage to identify if a specific consumer credit may or may not be covered by the MLA.
Click the button below to download the MLA Coverage Flow Chart.
