The October 3rd effective date for the amendments to the Military Lending Act (MLA) are just around the corner! The changes apply to additional types of accounts, modify the required disclosures and tweak the process for determining whether a consumer is a “covered borrower”. As with any regulatory change, half the battle is understanding what the changes will be and the other half is determining what internal processes are necessary to insure that your institution is in compliance!
The final MLA Rule allows your institution to determine “covered borrower” status by either by searching the MLA Database or relying upon information contained in a consumer report. Whatever option you utilize, you will need to make sure you maintain documentation of the determination.
The initial determination must be made within the following timeframes:
1. When a consumer initiates the transaction or 30 days prior;
2. When consumer applies to establish an account or 30 days prior; or,
3. When the creditor develops or processes a firm offer of credit and the covered borrower responds within 60 days. (Note: If the covered borrower doesn’t respond within 60 days, the creditor may no longer rely on the initial determination!)
For more information on this and the other changes to the MLA, be sure to register for our Military Lending Act WEBINAR on August 30, 2016! We will cover all of the details you need to know before the October 3, 2016 deadline!