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CFPB Report Finds Costly Loopholes in Military Lending Act Rules

Posted on 1/5/2015

The Consumer Financial Protection Bureau issued a report on Monday, December 29 highlighting how loopholes in the current Military Lending Act rules are increasing costs for service members. These gaps have allowed companies to offer high-cost loans to military families by avoiding the 36 percent rate cap, among other credit protections.

The Department of Defense recently proposed broadening the scope of the Military Lending Act rules to generally include credit offered or extended to active-duty military members that has a finance charge or is payable under a written agreement in more than four installments. This would expand the rules to cover many more types of credit, including deposit advance. The CFPB is urging the Department of Defense to finalize this proposal.

To read the CFPB report visit: http://files.consumerfinance.gov/f/201412_cfpb_the-extension-of-high-cost-credit-to-servicemembers-and-their-families.pdf

Read view CFPB's comment letter visit: http://files.consumerfinance.gov/f/201412_cfpb_petraeus-comment-on-32-cfr-232.pdf

In addition, the CFPB adjusted asset size exemption thresholds for banks under Regulation Z and Regulation C.

View the Reg Z adjustments visit: https://www.federalregister.gov/articles/2014/12/29/2014-30405/truth-in-lending-act-regulation-z-adjustment-to-asset-size-exemption-threshold

View the Reg C adjustments visit: https://www.federalregister.gov/articles/2014/12/29/2014-30404/home-mortgage-disclosure-regulation-c-adjustment-to-asset-size-exemption-threshold



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