Military Lending Act (MLA) NCUA Q&A – Vehicle Mechanical Repair Fees and MAPR

Compliance > Lending > Service Members > Military Lending Act
Q:  A credit union writes that, “With regard to auto secured loans, we offer a single payment mechanical repair coverage, otherwise known as MRC product, that covers repairs to the auto that secures the loan in the event that the warranty has expired.”  So, the question is, “Would the MRC payment need to be included in the MAPR calculation since it is related to the auto and used as collateral?”
 
A:   If the loan is for the purchase of a motor vehicle and is secured by the vehicle, the MLA does not apply.  For non-purchase loans secured by a motor vehicle, the creditor must include the cost of all ancillary products sold in connection with the credit transaction, pursuant to Section 232.4(c)(1)(ii) of the regulation.
 
 
 
 
 
ADDITIONAL INFORMATION – This Q&A was included in the NCUA’s June 2016 webinar entitled “Preparing to Comply with Regulatory Changes under the Military Lending Act.”  To listen to the audio and view the slides, interested parties may find that information here:  https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=1186523&sessionid=1&key=72023B4705907CDD0D194100B89E5D11&sourcepage=register
 
 

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