Military Lending Act (MLA) NCUA Q&A – MAPR and Fees Based on Declining Balance

Compliance > Lending > Service Members > Military Lending Act
Q:  So, the question, first question is, “On a closed-end loan, is there an exact calculation to help us calculate the MAPR with a debt collection, for example, life, disability, involuntary employment product?  This will be charged based on the declining balance of a loan.”  Second question is also an ancillary product on a closed-end loan such as gap and/or warranty based on a declining balance of the loan.
 
A:   Yes, for closed-end credit, the rule requires a creditor to follow the rules for calculating and disclosing the APR for credit transactions under Regulation Z based on the charges required for the MAPR as set forth in Section 232.4(c)(1).
 
In general, the procedures for calculating the APR for closed-end credit under Regulation Z are found in Section 1026.22(a)(1).  The explanations and instructions for computing the APR are set forth in Appendix J to Regulation Z.
 
 
 
 
 
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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