2015 Military Lending Act (MLA) Final Rule for Service Members – Covered Borrower

Compliance > Lending > Service Members > Military Lending Act
Q:   How does the 2015 MLA rule permit a creditor to ascertain whether a consumer is a covered borrower?
A:   Under the final rule, creditors are granted a safe harbor if they use either or both of the two methods — the MLA database (maintained by the DOD) or consumer reports from a nationwide consumer credit reporting agency — to verify borrower status and comply with recordkeeping requirements.  Creditors are allowed to rely on the initial covered borrower check for up to 60 days after a firm offer of credit is extended to the borrower.

ADDITIONAL INFORMATION:  See details in the Department of Defense’s 2015 Final Rule on “Limitations on Terms of Consumer Credit Extended to Service Members and Dependents,” here:  https://www.federalregister.gov/articles/2015/07/22/2015-17480/limitations-on-terms-of-consumer-credit-extended-to-service-members-and-dependents

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