Military Lending Act (MLA) NCUA Q&A – Finance Charges and Institution Imposed Insurance

Compliance > Lending > Service Members > Military Lending Act
Q:  “The MAPR calculation as defined by 32 CFR Section 232.4 is to include finance charges plus the items in Section 232.4(c)(i)(iii), it is unclear whether comprehensive and collision insurance or forced place insurance that is not a state required insurance but rather a financial institution imposed insurance should be considered an add-on product or would the Regulation Z finance charge exceptions apply?”
 
A:   The MLA regulation requires creditors to include in the MAPR any ancillary product applicable to the extension of credit.  Creditors must also include all finance charges.  For MLA purposes, finance charge has the same meaning as finance charge under Regulation Z.  Therefore if not otherwise specified in the MLA regulation, you should refer to the provisions of Regulation Z and its official interpretations to determine if you must include in the MAPR a non-voluntary charge such as this.  
 
 
 
 
 
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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