MLA Status Check Update

In our January Newsletter, we told you about the recent revisions to the Military Lending Act Interpretive Q&A’s.  A new question regarding the timing of the status check was included for those looking to qualify for the safe harbor.


To qualify for the safe harbor, the Rule states that the status check generally needs to be done at the time someone initiates a transaction or applies for an account, or 30 days prior to either.  The August 2016 Interpretive Q&A’s seemed to make an attempt at broadening this time period by stating that To benefit from the safe harbor…, a creditor must determine…covered borrower status at or before the time of the transaction or the time an account is established  The new Q&A addresses this again by stating that you can qualify for the safe harbor by doing the status check simultaneously with the initiation of the transaction or submission of an application…or during…processing of that application


As we noted in our newsletter, we’ve always taken a conservative stance on this topic, due to the risk involved.  We do believe; however, that together these Q&A’s allow you to do the status check after the actual application and stillqualify for the safe harbor.  We also believe you must do the check prior to closing the loan or opening the account.


So, not only does this give you more time to do the status check, it may also make it easier to use a credit report to do the status check if you’re interested in that option.


Want to know more?  Join us on January 24, 2018, for our one-hour, video webinar on the Military Lending Act.  We will delve into the requirements of the Military Lending Act including the newly revised guidance.  Register today!


Diane Dean

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