Military Lending Act (MLA) DoD Interpretive Rule – Disclosures After Becoming Obligated

Compliance > Lending > Service Members > Military Lending Act
Q:  In circumstances where Regulation Z allows a creditor to provide disclosures after the borrower has become obligated on a transaction (as in the case of purchase orders or requests for credit made by mail, telephone, or fax), does the MLA provide for similarly delayed disclosure?
 
A:  Yes. 32 CFR 232.6(a) states that a creditor shall provide mandatory loan disclosures, including ‘‘any disclosure required by Regulation Z,’’ to a covered borrower ‘‘before or at the time the borrower becomes obligated on the transaction or establishes an account for the consumer credit. . .’’  Section 232.6(a)(2) further states that ‘‘any disclosure required by Regulation Z . . . shall be provided only in accordance with the requirements of Regulation Z that apply to that disclosure...’’ In certain instances Regulation Z allows a creditor to provide a disclosure after the borrower has become obligated on a transaction, as in the case of purchase orders or requests for credit made by mail, telephone, or fax under 12 CFR 1026.17(g). The MLA regulation’s general timing requirement does not override more specific disclosure timing provisions in Regulation Z. The requirement in § 232.6(a) that any disclosure required by Regulation Z be provided only in accordance with the requirements of Regulation Z does not amount to a requirement that MLA-specific disclosures be separately provided to borrowers in advance of TILA disclosures. Thus, the disclosures required in § 232.6(a) may be provided at the time prescribed in Regulation Z.
 
 
 
 

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