This document discusses key protections and regulations for US military consumers, including the Military Lending Act (MLA) and Servicemembers Civil Relief Act (SCRA). The MLA caps interest rates on certain loans to active duty service members at 36% and was expanded in 2016. The SCRA offers protections for military personnel, such as capping interest rates on pre-service loans at 6%. Financial institutions are advised to comply with these regulations, communicate applicable benefits to military customers, and help service members understand their rights.

1. Protecting and Serving
Military Credit Consumers

2. 1.46 million active personnel in the U.S. military.
http://us-military-branches.insidegov.com/app-question/443/How-many-people-are-there-in-the-US-military
http://www.globalfirepower.com/country-military-strength-detail.asp?country_id=united-states-of-america
http://www.nctsn.org/resources/public-awareness/month-military-child
http://download.militaryonesource.mil/12038/MOS/Reports/2014-Demographics-Report.pdf
http://download.militaryonesource.mil/12038/MOS/Reports/2014-Demographics-Report.pdf
Military by the Numbers
86.8% of active duty enlisted members are stationed in the
United States and U.S. territories.
49.6% of active duty enlisted personnel are 25 years of age
or younger
2 million military children in the U.S., ranging in ages from
newborn to 18 years old; 1.3 million military children are school-aged
1.1 million active reserve personnel in the U.S. military.

3. With members of the U.S. military making the ultimate
sacrifice – service to country – the government has
created several protections to assist with “consumer
credit” transactions and their financial lives.

4. Military Lending Act

5. Military Lending Act (MLA)
– New in 2016
Primary Goal: Protect active-duty soldiers from high-rate loans, such as payday loans,
car title loans and tax-refund anticipation loans.
• Originally passed by Congress in 2006 and implemented by the Department of
Defense (DOD) in 2007
What it covers:
• 36% interest rate cap on covered loans to active duty service members
• Required disclosures to alert service members to their rights
• Prohibits creditors from requiring a service member to submit to arbitration in the
event of a dispute

6. New rules were introduced in July 2015 and became effective on October 1, 2015.
Compliance is required by October 3, 2016, but rules for credit cards is delayed
until October 3, 2017.
• Now includes addition of fees paid “for a credit-related ancillary product sold
in connection with the credit transaction.” Although the MAPR limit is 36%,
ancillary product fees can add up and exceed the MAPR limit.
• Includes a “safe harbor” from liability for lenders who verify the MLA status of a
consumer.
• Lenders need to identify who is in active military duty at origination, obtaining
information directly or indirectly from the Department of Defense’s
DMDC database.
New MLA Regulations

7. “When I drive down a strip
outside a military installation
and count 20 fast-cash lenders
in less than 4 miles, that’s not a
convenience, that’s a problem.”
– Holly Petraeus, CFPB Assistant Director

8. Servicemembers
Civil Relief Act

9. Primary Goal: Offer an umbrella of protections to military personnel whose service
duties conflict with the financial obligations they have as civilians.
• Originally called the Soldiers and Sailors Civil Relief Act when first passed in 1918.
• Got its current name when rewritten and expanded again in 2003
What it covers:
• An interest rate cap of 6% on loans military service members incurred prior to
becoming active. Applies to any charges – including credit card debt, service charges
and renewal charges or fees – except bona fide insurance. Federally guaranteed
student loans were added in 2008.
• Accounts of the service member, or joint accounts of the service member and the
service member’s spouse, are additionally eligible.
To receive the interest rate reduction, a service member must request it in
writing and include a copy of his or her military orders.
Servicemembers Civil Relief Act (SCRA)

10. Best Practices to Serve
Military Consumers in
Financial Services
As a lender, you must adhere to SCRA and MLA regulations, so ensure you have
systems and governance in place to manage compliance.
Consider adding pages to your website, providing information on SCRA and MLA,
so military customers understand their rights and how to best work with you.
If you offer additional military benefits, communicate these. Many lenders offer
military rebate programs – don’t be shy in advertising these discounts.
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11. To learn more about how Experian can help you best service
you military consumers and adhere to regulations like MLA
and SCRA, visit experian.com/military
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This information is for educational purposes only. It is not intended to be nor should it be relied upon as legal advice.
If you have questions about the information contained herein, you should consult your own legal and compliance departments.