As you know, the new mandatory compliance requirements under the expanded Military Lending Act (MLA) take effect October 3, 2016 (except for credit card accounts). The final rule for credit card accounts will be effective October 3, 2017. Some of our credit union partners have contacted us with questions regarding MLA and its impact on the lending process. The questions have been centered around the changes to consumer loan forms necessary to comply with the changes under the MLA. Insurance Trust has researched this unique issue and has provided answers to the below questions your credit unions may have as well.
Do I need to re-map my consumer loan forms to comply with MLA?
It depends on your forms provider. One of our credit union forms partners has (with the guidance of legal counsel) prepared an addendum to work with current consumer lending forms. This addendum not only provides the required MAPR statement, it also disclaims and waives language in existing loan agreements that is not consistent with the MLA for loans to covered borrowers. Using an addendum to loan protects the credit union from prohibited terms in existing loan documents and eliminates the costs associated with a separate set of loan documents.
Do all forms providers share equivalent compliance rulings?
Our forms provider has confirmed that this addendum to loan will meet the requirements necessary to comply with the expanded MLA. However, each forms provider in the marketplace has a unique ruling based on their forms program. Our provider is willing to supply this document to our credit union partners, regardless of your forms provider, at the discretion of the credit union. To clarify, the advocacy of this addendum to loan is ultimately up to the credit union to assume, based on the differing legal opinions of two highly respected credit union forms providers.
- If your credit union would like to utilize the addendum to loan, please let us know.
- If your credit union decides to follow your current MLA forms solution but would like a competitive quote for lending forms, please let us know.
Additionally, if your credit union would like to exercise the option to use any of Insurance Trust’s three forms providers, please note that we cover 100% of the cost of consumer lending forms for our Credit Life & Disability / Debt Protection program clients.