Newsroom

NCUA plans to "submit formal comments" on the Department of Defense's proposed rule changing the definition of consumer credit under the Military Lending Act, NCUA Board Chairman Debbie Matz says in the latest issue of The NCUA Report.

Matz wrote in the newsletter's Chairman's Corner that NCUA has already provided DoD "two rounds of informal interagency comments." She expressed concern that this proposal "would prevent federal credit unions from serving military members with payday alternative loans." NAFCU, in a letter to NCUA in September, urged the agency to review its own rules on short-term, small-amount loans so federal credit unions are not blocked in the future from offering them because of MLA rule changes.

NAFCU has urged DoD to extend the comment period on the proposal. Currently, comments are due Nov. 28.

On Tuesday, NAFCU and five other financial industry trades jointly asked DoD for a 45-day comment period extension of the proposal. The groups – NAFCU, American Financial Services Association, Consumer Bankers Association, American Bankers Association, Association of Military Banks of America and Independent Community Bankers of America – are also seeking a meeting with DoD officials to discuss the proposed rule.

Issued in September, the proposal, which subjects more credit products to the DoD's 36 percent interest-rate cap, would amend DoD's rules implementing the Military Lending Act. An advance notice of proposed rulemaking was issued last year, but Tuesday's letter notes the proposed rule is complex and makes "radical changes" to the earlier ANPR.

NAFCU also urged a 45-day extension in a letter last month from President and CEO Dan Berger. NAFCU will share its concerns about the proposal in official comments to DoD.