Credit Union Forms: Military Lending Act [Update]
When the Military Lending Act (MLA) regulation was revised it specified that it would apply to consumers who, at the time they become obligated on a consumer credit transaction or establish an account for consumer credit, are a member of the armed forces serving on Active Duty under a call or order greater than 30 days, or on Active Guard and Reserve Duty, or a dependent of such individual, except to the extent that the following credit transactions would be exempt:
- Dwelling-secured loans, including loans to finance the purchase or the initial construction of the dwelling, refinance transactions, home equity loans, home equity lines of credit, and reverse mortgages;
- Loans to finance the purchase of a motor vehicle when the loan is secured by that vehicle; and
- Loans to finance the purchase of other types of personal property when the loan is secured by that property.
This helped borrowers that receive credit under a covered transaction. These transactions, however, must also include an additional disclosure that contains a statement of the Military Annual Percentage Rate (MAPR) and payment schedule (in the case of closed-end credit) or account-opening disclosure (in the case of open-end credit). Oak Tree is in the process of developing such disclosures and anticipates that they will be available shortly.
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