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Military Lending Act: Exam Procedure Changes,
Post-Implementation Considerations & FAQs
M. Elizabeth Fast, Esq.
Spencer Fane LLP
Phone: (800) 526-6529 toll free
Fax: (816) 474-3216
February 2017
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Today’s Presenter
Elizabeth Fast, JD, CPA
Spencer Fane LLP
Elizabeth Fast is a partner with Spencer Fane LLP where she
specializes in the representation of financial institutions. Elizabeth is
the head of the firm’s training division. She received her law degree
from the University of Kansas and her undergraduate degree from
Pittsburg State University. In addition, she has a Master of Business
Administration degree and she is a Certified Public Accountant. Before
joining Spencer Fane, she was General Counsel, Senior Vice
President, and Corporate Secretary of a $9 billion bank with more than
130 branches, where she managed all legal, regulatory, and
compliance functions. She is a member of the Missouri State Banking
Board by appointment of the Governor.
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Background
• Military Lending Act (MLA) originally became
effective on 10-01-07
• Purpose: Impose limitations on the cost and
terms of certain extensions of consumer credit to
servicemembers and their dependents, and to
require additional consumer disclosures to them
• MLA grants authority to the Department of
Defense to adopt regulations – 32 C.F.R. §232
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Background (cont.)
• Previously, MLA only applied to non-traditional
loans (i.e., payday loans, title loans, and tax
refund anticipation loans)
• Most banks and credit unions don’t extend those
types of non-traditional loans, so they previously
weren’t subject to MLA
• Recent regulations make MLA applicable to more
traditional loans and credit cards, so your
institution is now subject to MLA
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Implementation Dates of New Regulations
• Compliance date for new regulations was 10-3-16
(credit cards is 10-3-17)
• Old regulations continue to apply to credit
extended before 10-3-16
• New regulations only apply to credit extended
after 10-3-16
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Summary of New Regulations
• Continues 36% maximum interest rate
• Extends protection of MLA to broader range of
closed-end and open-end loans
• Modifies mechanism creditor can use when
assessing whether person is a “covered borrower”
• Modifies disclosures that creditor must provide
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Important Definitions
• New regulation applies to “consumer credit”
extended to a “covered borrower”
– Consumer Credit
– Covered Borrower
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Definition of Consumer Credit
• New regulation revises definition of consumer
credit to be more consistent with Regulation Z.
New regulation defines consumer credit as credit
extended to a covered borrower primarily for
personal, family, or household purposes that is:
(1) subject to a finance charge, or (2) payable by
written agreement in more than four installments
– Previously, MLA only applied to payday loans,
vehicle title loans, and tax refund anticipation loans
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Consumer Credit (cont.)
• Consumer credit does NOT include:
– Credit secured by residential mortgage (includes purchase,
construction, refinance, HELOC, and reverse mortgage)
• Example: Consumer submits a loan application to purchase a
new home. Does MLA apply? NO
• Example: Consumer submits a HELOC application for his
existing home. Does MLA apply? NO
– Credit intended to finance purchase of a motor vehicle when
credit is secured by that vehicle
• Example: Consumer submits a loan application to purchase a
new or used car and loan will be secured by car purchased.
Does MLA apply? NO
• Example: Consumer submits a loan application and he will
pledge his existing car that he purchased back in 2015.
Does MLA apply? YES
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Consumer Credit (cont.)
• Consumer credit does NOT include:
– Credit intended to finance purchase of personal property
when credit is secured by that personal property
• Example: Consumer submits a loan application for
unsecured credit that he will use to purchase a new
computer. Does MLA apply? YES
• Example: Consumer submits a loan application to
purchase a new computer and loan will be secured by
new computer. Does MLA apply? NO
• Example: Consumer submits a loan application to
purchase a new computer. The loan will be secured by the
new computer, but the loan proceeds exceed the purchase
price of the computer so loan provides “additional
proceeds” to the consumer. Does MLA apply? YES
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Consumer Credit (cont.)
Does credit that a creditor extends for the purpose of purchasing personal
property, which secures the credit, fall within the exception to “consumer
credit” under 32 CFR 232.3(f)(2)(iii) where the creditor simultaneously
extends credit in an amount greater than the purchase price?
Answer: No. Section 232.3(f)(1) defines “consumer credit” as credit extended to
a covered borrower primarily for personal, family, or household purposes that is
subject to a finance charge or payable by written agreement in more than four
installments. Section 232.3(f)(2) provides a list of exceptions to paragraph (f)(1),
including an exception for any credit transaction that is expressly intended to
finance the purchase of personal property when the credit is secured by the property
being purchased. A hybrid purchase money and cash advance loan is not expressly
intended to finance the purchase of personal property, because the loan provides
additional financing that is unrelated to the purchase. To qualify for the purchase
money exception from the definition of consumer credit, a loan must finance only
the acquisition of personal property. Any credit transaction that provides purchase
money secured financing of personal property along with additional “cash-out”
financing is not eligible for the exception under § 232.3(f)(2)(iii) and must comply
with the provisions set forth in the MLA regulation.
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Consumer Credit (cont.)
• Consumer credit does NOT include:
– Credit that is an exempt transaction under
Regulation Z (other than exemption under
§1026.29) or exempt from disclosure
requirements under Regulation Z
– Credit where creditor determines consumer is
not a “covered borrower” by using safe harbor
method
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Definition of Covered Borrower
• New regulation expressly states that it does
not apply to credit extended to a consumer
who is not a covered borrower at the time
he/she becomes obligated on the credit, and
it does not apply to the credit when the
consumer no longer is a covered borrower
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Covered Borrower (cont.)
• A member of the Army, Navy, Air Force, Marines,
or Coast Guard serving on active duty under call
or order that does not specify a period of 30 days
or less
• A member serving on Active Guard or Reserve
duty as that term is defined under 10 U.S.C.
101(d)(6) (full-time duty for period of 180
consecutive days or more)
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Covered Borrower (cont.)
• Dependent of member as described in 10 U.S.C.
1072(2)(A), (D), (E) & (I)
– Spouse
– Child under 21
– Child under 23 enrolled full-time in school and dependent for
over ½ support
– Child that became mentally or physically incapacitated before
age 21 (or age 23 while enrolled full-time in school) and
dependent for over ½ support
– Parent or parent-in-law who resides in household and dependent
for over ½ support
– Legal custody of unmarried person under same rules for child,
dependent for over ½ support, and resides with member unless
separated by military service or under institutional care
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Covered Borrower (cont.)
• Example: Consumer A is member of armed forces but
not serving on active duty. He establishes closed-end
credit account at FI. Thereafter, he is ordered to serve
on active duty, thereby becoming a covered borrower.
Then, he establishes an open-end line of credit at FI.
MLA applies to the open-end line of credit (entered into
after active duty), but not the closed-end credit (entered
into before active duty).
• Continuing Example: One year after establishing the
open-end line of credit, he ceases to serve on active
duty. MLA no longer applies to the open-end line of
credit because he is no longer a covered borrower
(after ceases active duty).
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How to Determine if Person is
Covered Borrower
• Creditor permitted to apply its own method to
determine if person is covered borrower
• Old regulation safe harbor method:
– Person signed special statement (i.e., check the
box) to confirm that they were or were not a
covered borrower
– This old safe harbor method is no longer a safe
harbor method after October 2, 2016
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How to Determine if Person is
Covered Borrower (cont.)• New regulation permits two safe harbor methods:
1. Verify status by checking the DOD’s Defense Manpower Data
Center; or
– https://mla.dmdc.osd.mil/
– Must have last name, date of birth, and SSN
2. Verify status by using indicator obtained from nationwide
consumer reporting agency or reseller of report
– Consumer reporting agencies are trying to get access to
DOD database
• Under safe harbor methods, must retain copy of DOD
database certificate or consumer report from no earlier than
30 days prior to date consumer initiates transaction
(60 days prior to when creditor made firm offer of credit)
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Interest Rate Limitation
• MLA restricts Military Annual Percentage Rate (MAPR) to 36% or less
• MAPR is not the same as APR calculated under Regulation Z –
MARR includes fees that APR does not include
• MAPR includes the following:
– Finance charges
– Application fee (exception for bank, savings association, and credit union
when making a short-term, small-amount loan if fee charged not more
than once in any 12-month period)
– Fees to participate in plan or arrangement for credit
– Credit insurance premiums, including charges for single premium credit
insurance, fees for debt cancellation or debt suspension agreements
– Fees for credit-related ancillary products sold in connection with the
credit transaction
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Interest Rate Limitation (cont.)
• Is GAP insurance included in the MAPR calculation?
Probably yes, since the MAPR calculation includes
credit insurance premiums, fees for debt
cancellation, and credit-related ancillary products.
• Is an extended vehicle warranty policy included in
the MAPR calculation? DOD hasn’t issued a clear
interpretation as to whether warranty policies are
deemed part of the vehicle purchase price which
would not be included in the MAPR calculation or
deemed credit-related ancillary products which
would be included in the MAPR calculation.
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Interest Rate Limitation (cont.)
Under 32 CFR 232.4(b), are creditors permitted to waive fees or periodic
charges at the end of a billing cycle or earlier for open-end credit, in order
to prevent a borrower from being assessed a military annual percentage
rate (MAPR) in excess of 36 percent during that billing cycle?
Answer: Yes. Section 232.4(b) requires that a creditor may not impose an
MAPR greater than 36 percent in connection with an extension of consumer
credit that is closed-end credit or in any billing cycle for open-end credit. In an
open-end credit account, a covered borrower's use of a line of credit might,
under certain circumstances, give rise to the imposition of a combination of
fees and/or periodic charges that would cause the MAPR to exceed the limit in
§ 232.4(b). A creditor can comply with § 232.4(b) by designing a combination of
periodic rates and fees that cannot possibly result in an MAPR greater than 36
percent. Nevertheless, nothing in 32 CFR part 232 prohibits a creditor from
complying by waiving fees or finance charges, either in whole or in part, in
order to reduce the MAPR to 36 percent or below in a given billing cycle. Thus,
a creditor could alternatively comply by not imposing charges in excess of 36
percent MAPR that would otherwise be permitted under the credit agreement.
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Interest Rate Limitation (cont.)
• MAPR for credit cards excludes application fee,
participation fee, and transaction fee if the fee is:
1. Bona fide; and
– Credit insurance premiums, debt cancellation fees,
and ancillary credit products aren’t bona fide fees
for this purpose
2. Reasonable for that type of fee
– Compare to similar fees imposed by other creditors
– Safe harbor for reasonableness of fee is if it is less
than or equal to average fee charged during
preceding 3 years by 5 or more creditors having
U.S. cards of at least $3 billion
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Interest Rate Limitation (cont.)Under 32 CFR 232.4(d), is it permissible to consider benefits provided by
credit card rewards programs in determining whether the amount of a fee is
(a) less than or equal to an average amount of a fee for a substantially similar
product or service for purposes of comparison under the safe harbor and
(b) reasonable overall?
Answer: Generally, yes. Section 232.4(d)(1) provides that for a credit card account
under an open-end (not home-secured) consumer credit plan, a bona fide fee, other
than a periodic rate, is not a charge required to be included in the MAPR, provided it
is a bona fide fee and reasonable for that type of fee. Under § 232.4(d)(3)(i), whether
a fee is reasonable is determined by comparison to fees typically imposed by other
creditors for the same or a substantially similar product or service. Under
§ 232.4(d)(3)(iii), whether a fee is reasonable depends on other factors relating to
the credit card account. Section 232.4(d)(3)(iv) further clarifies that whether a
participation fee is reasonable may be determined in reference to whether a credit
card offers additional services or other benefits. Moreover, the supplementary
information to the July 2015 Final Rule explains that “the `reasonable' condition for a
bona fide fee is intended to be applied flexibly so that, in general, creditors may
continue to offer a wide range of credit card products that carry reasonable costs
expressly tied to specific products or services and which vary depending upon the
covered borrower's own choices regarding the use of the card.”
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Interest Rate Limitation (cont.)
Under the Department's flexibly applied conditional
exclusion, creditors may use any reasonable approach in
identifying whether a fee is substantially similar for
purposes of comparison and reasonable overall. Thus, the
Department's policy, in this regard, permits a creditor to
consider whether the benefits provided by a rewards
program in determining whether a fee is reasonable overall.
Moreover, creditors may consider rewards program
benefits in determining whether the amount of a fee is less
than or equal to an average amount of a fee for a
substantially similar product or service for purposes of the
safe harbor in § 232.4(d)(3)(ii).
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Required Disclosures
• Before or at time covered borrower becomes
obligated on transaction, written disclosures
must be given to covered borrower containing:
– MAPR description applicable to the extension of credit
• Do not disclose actual numerical MAPR (because it will
conflict with APR under Reg Z), but must generally
describe charges used to calculate MAPR
• Use Model Disclosure Statement
– Any disclosures required by Reg Z
– Clear description of the payment obligation
• If payment obligation disclosed as part of the Reg Z
disclosure, then the Reg Z disclosure will suffice
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Required Disclosures (cont.)
• Model disclosure statement: “Federal law provides
important protections to members of the Armed Forces
and their dependents relating to extensions of consumer
credit. In general, the cost of consumer credit to a
member of the Armed Forces and his or her dependent
may not exceed an annual percentage rate of 36
percent. This rate must include, as applicable to the
credit transaction or account: The costs associated with
credit insurance premiums; fees for ancillary products
sold in connection with the credit transaction; any
application fee charged (other than certain application
fees for specified credit transactions or accounts); and
any participation fee charged (other than certain
participation fees for a credit card account).”
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Required Disclosures (cont.)
• Disclosures must be given in writing and in a
form the borrower can keep
• In addition to written disclosures, creditor must
orally provide the disclosures:
– In person; or
– Creditor may provide a toll-free telephone number on
the loan application or along with the written
disclosures, so borrower can obtain disclosures orally
• Renewal or refinancing requires new disclosures
if it is deemed a new transaction under
Regulation Z
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Required Disclosures (cont.)
How may a creditor orally provide the payment obligation disclosure required
under 32 CFR 232.6(a)(3) to meet the requirements of 32 CFR 232.6(d)(2)?
Answer: Section 232.6(a)(3) requires a creditor to provide to a covered borrower,
before or at the time the borrower becomes obligated on the transaction or
establishes an account for the consumer credit, a clear description of the payment
obligation of the covered borrower, as applicable. A payment schedule (in the case
of closed-end credit) or an account-opening disclosure (in the case of open-end
credit) provided pursuant to the requirement to provide Regulation Z disclosures
satisfies this obligation. Therefore, a creditor may orally provide the information in a
payment schedule or an account-opening disclosure to a covered borrower.
However, an oral recitation of the payment schedule or the account-opening
disclosure is not the only way a creditor may comply with § 232.6(a)(3). A creditor
may also orally provide a clear description of the payment obligation of the covered
borrower by providing a general description of how the payment obligation is
calculated or a description of what the borrower's payment obligation would be
based on an estimate of the amount the borrower may borrow. For example, a
creditor could generally describe how minimum payments are calculated on open-
end credit plans issued by the creditor and then refer the covered borrower to thecontinued on next page
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Required Disclosures (cont.)
written materials the borrower will receive in connection with opening the plan.
Alternatively, a creditor could choose to generally describe borrowers' obligations
to make a monthly, bi-monthly, or weekly payment as the case may be under the
borrowers' agreements.
Neither the MLA nor the MLA regulation specifies particular content or format for
the requirement of a clear, oral description of the payment obligation. Also, nothing
in the MLA or the MLA regulation requires that the clear description of the payment
obligation provided in writing must be the same as the oral disclosure, provided
that both disclosures are clear and accurate. As explained in the supplementary
information to the Department's July 2015 Final Rule, the Department's approach
has been to interpret the MLA's oral disclosure requirement in a manner that
provides creditors “straightforward mechanisms” that afford “latitude to develop the
same (or consistent) systems to orally provide the required disclosures—
regardless of the particular context . . .” The requirement of a clear, oral payment
obligation disclosure has sufficient breadth that creditors may choose a variety of
acceptable oral disclosure compliance strategies. Thus, under the Department's
approach, a generic oral description of the payment obligation may be provided,
even though the disclosure is the same for borrowers with a variety of consumer
credit transactions or accounts.
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Required Disclosures (cont.)If a creditor chooses to provide the information that is required to be
provided orally by providing a toll-free telephone number, consistent with
32 CFR 232.6(d)(2)(ii)(B), when must the information be available to the
borrower?
Answer: Section 232.6(d)(2) requires a statement of the MAPR and a clear description
of the covered borrower's payment obligation to be provided to the covered borrower
orally. Creditors may satisfy this requirement by providing the information to the covered
borrower in person or through a toll-free telephone number. If the creditor decides to
provide the borrower with a toll-free telephone number, the toll-free telephone number
must be provided on i) a form the creditor directs the consumer to use to apply for the
transaction or account, or ii) the written disclosure of the information that is required
under § 232.6(d)(1). Since § 232.6(d)(2) permits creditors to provide oral disclosures by
providing a toll-free telephone number, such information must be available from the time
the creditor provides the toll-free telephone number. The difficulty of providing this
information in a timely way through a toll-free telephone system is mitigated by the
Department's interpretation of mandatory oral disclosures as allowing for a nonnumeric
statement of the MAPR and a generic, clear description of the payment obligation.
See § 232.6(c) and Question and Answer #12 of these Interpretations. Oral disclosures
provided through a toll-free telephone system need only be available under
§ 232.6(d)(2)(ii)(B) for a duration of time reasonably necessary to allow a covered
borrower to contact the creditor for the purpose of listening to the disclosure.
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Prohibited Actions
• Creditor (or its assignee) is prohibited from taking
the following action:
– Rolling over, renewing, refinancing or consolidating a loan
made previously by the same creditor, unless the new
transaction results in terms more favorable, such as a
lower MAPR (exception for bank, savings association,
and credit union)
– Requiring borrower to waive his/her rights
– Requiring borrower to submit to arbitration or other
onerous legal notice provisions (regulation expressly
states any agreement to arbitrate is not enforceable)
– Demanding unreasonable notice from borrower as a
condition for legal action
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Prohibited Actions (cont.)
– Using a check or other method of access to a
deposit, savings or other financial account
maintained by borrower, except:
• The creditor may require an EFT to repay the loan,
unless otherwise prohibited by law
• The creditor may require direct deposit of borrower’s
salary, unless otherwise prohibited by law
• The creditor may, if not otherwise prohibited by law,
take a security interest in funds deposited in an
account established in connection with the extension
of credit
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Prohibited Actions (cont.)
Does the limitation in § 232.8(e) on a creditor using a check or other method
of access to a deposit, savings, or other financial account maintained by the
covered borrower prohibit the borrower from repaying a credit transaction
by check or electronic fund transfer?
Answer: No. As a general proposition the prohibition of a creditor's use of a
check or other method of access in § 232.8(e) does not in any way imply that a
creditor cannot be paid. In no case does paragraph (e) prevent covered borrowers
from tendering a check or authorizing access to a deposit, savings, or other
financial account to repay a creditor. Section 232.8(e) also does not prohibit a
covered borrower from authorizing automatically recurring payments, provided
that such recurring payments comply with other laws, such as the Electronic Fund
Transfer Act and its implementing regulations, including 12 CFR 1005.10, as
applicable. In contrast, § 232.8(e) prohibits a creditor from using the borrower's
account information to create a remotely created check or remotely created
payment order in order to collect payments on consumer credit from a covered
borrower. Similarly, a creditor may not use a post-dated check provided at or
around the time credit is extended that deprives the borrower of control over
payment decisions, as is common in certain payday lending transactions.
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Prohibited Actions (cont.)
Section 232.8(e)(1) and (2) further clarify that covered borrowers may
tender checks and authorize electronic fund transfers by specifying
permissible actions creditors may take to secure repayment by
covered borrowers. The exceptions address cases where a creditor
requires a covered borrower to provide repayment in a certain way.
Specifically, under § 232.8(e)(1), a creditor may require an electronic
fund transfer to repay a consumer credit transaction, unless otherwise
prohibited by law. The Department notes that 12 CFR 1005.10(e)(1)
prohibits anyone from conditioning an extension of credit to a
consumer on the consumer's repayment by preauthorized electronic
fund transfers (except for credit extended under an overdraft credit
plan or extended to maintain a specified minimum balance in the
consumer's account). However, a preauthorized electronic fund
transfer is defined under 12 CFR 1005.2(k) as an electronic fund
transfer authorized in advance to recur at substantially regular
intervals.
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Prohibited Actions (cont.)
In addition, § 232.8(e)(2) clarifies that a creditor is permitted to require
direct deposit of the consumer's salary as a condition of eligibility for
consumer Start Printed Page 58845credit, unless otherwise prohibited
by law. While § 232.8(g) prohibits a creditor from requiring as a
condition for the extension of consumer credit that the covered
borrower establish an allotment to repay an obligation, the regulation
does not apply this restriction to a “military welfare society” or a
“service relief society” as defined in 37 U.S.C. 1007(h)(4).
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Prohibited Actions (cont.)
Does the limitation in § 232.8(e) on a creditor using a check or
other method of access to a deposit, savings, or other financial
account maintained by the covered borrower prohibit the
borrower from granting a security interest to a creditor in the
covered borrower's checking, savings or other financial account?
Answer: No. The prohibition in § 232.8(e) does not prohibit covered
borrowers from granting a security interest to a creditor in the covered
borrower's checking, savings, or other financial account, provided that
it is not otherwise prohibited by applicable law and the creditor
complies with the MLA regulation including the limitation on the MAPR
to 36 percent. As discussed in Question and Answer #16 of these
Interpretations, § 232.8(e) prohibits a creditor from using the
borrower's account information to create a remotely created check or
remotely created payment order in order to collect payments on
consumer credit from a covered borrower or using a post-dated check
provided at or around the time credit is extended.
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Prohibited Actions (cont.)
Section 232.8(e)(3) further clarifies that covered borrowers may
convey security interests in checking, savings, or other financial
accounts by describing a permissible security interest granted by
covered borrowers. Thus, for example, a covered borrower may
grant a security interest in funds deposited in a checking,
savings, or other financial account after the extension of credit in
an account established in connection with the consumer credit
transaction.
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Prohibited Actions (cont.)
– Using title of vehicle as security for extension
of credit (exception for banks, associations,
and credit unions)
– Requiring borrower to establish an allotment
to repay credit, as condition for the extension
of credit
– Prohibiting borrower to prepay credit, or
charging a penalty for prepaying all or part of
the credit
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Penalties
• Creditor who knowingly violates the MLA shall
be guilty of a misdemeanor and may be fined or
imprisoned up to one year or both.
• Any contract which is in violation of the MLA
is void.
• Creditor liable for actual damages sustained
by consumer, but not less than $500 for
each violation.
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Penalties (cont.)
• Other remedies are permitted, such as
consequential and punitive damages.
• If consumer is successful in action against
creditor, creditor liable for consumer’s court
costs and attorney fees.
• Conversely, if creditor is successful and if court
finds consumer brought action against creditor in
bad faith and for the purpose of harassment,
court can hold consumer liable for creditor’s
attorney fees.
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Penalties (cont.)
• Creditor has defense to civil damages if
creditor shows by preponderance of evidence
that violation was not intentional and resulted
from bona fide error notwithstanding the
maintenance of procedures reasonably
adapted to avoid such error, but error of legal
judgment is not bona fide error
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Coordination with Servicemembers
Civil Relief Act (SCRA)
• MLA states that nothing in MLA shall be
construed to limit or otherwise affect the
applicability of SCRA
• MLA applies to loans entered into after
servicemember on active duty
• SCRA applies to loans entered into before
servicemember on active duty
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SCRA
• 1940 – Soldiers & Sailors Civil Relief Act (SSCRA)
• 2003 – Servicemembers Civil Relief Act (SCRA) –
replaces the SSCRA
• Purpose – Provide servicemembers with interest
rate relief and protection from creditor remedies
(i.e., foreclosure, garnishment, repo) during the
period of military service
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SCRA Interest Rate
• SCRA requires lender to reduce interest rate
on any pre-service “obligation or liability” to 6%
during the period of military service
– If mortgage obligation, interest rate relief of 6%
is extended for one year after return from
military service
• Excess interest over 6% must be forgiven –
not just deferred
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Must Be Before Active Service
• SCRA only applies to an obligation or liability
entered into before servicemember entered
active military service
• Open-end credit (i.e., credit card) – rate
reduction does not apply to new amounts
borrowed/charged after enter military service
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Servicemember Responsibilities
• Servicemember must provide creditor with
written notice and a copy of his/her orders to
military service.
• Servicemember can request the rate reduction
up to 180 days after release from military
service. Rate reduction would then have to be
applied by creditor retroactively to the period of
military service.
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Servicemember Responsibilities (cont.)
• Servicemember is not required to show that
his/her ability to pay is affected by military
service in order to obtain the rate reduction.
• But, the creditor can apply to the court for relief if
creditor believes the ability to pay the obligation
is not materially affected by the military service.
• Basically, the only way to not lower the rate to
6% is with court permission.
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Limitations on
Repossession & Foreclosures
• An installment contract secured by real or personal
property cannot be terminated for breach of contract
[including nonpayment] without a court order whether the
breach occurred before or during the period of military
service.
• Property which is the subject of an installment contract
cannot be repossessed without a court order during the
person’s military service.
• Obligation secured by mortgage or deed of trust cannot be
foreclosed on during the period of military service plus one
year thereafter. (On 1-1-18, will revert back to 90 days.)
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If you have any questions regarding this
presentation, you are welcome to contact:
M. Elizabeth Fast, Esq.
Spencer Fane, LLP
Phone: (800) 526-6529 toll free
Fax: (816) 474-3216
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