Jul 23, 2015 - here:https://onedrive.live.com/view.aspx?resid=DB3152109FBA07C6!8971&ithint=file%2cpdf. &app=Word
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July 23, 2015
Department of Defense Moves to Protect Servicemembers and their Families from Abusive Creditors (Columbus, Ohio) The Department of Defense has issued an expansive new rule that protects servicemembers and their families from high-cost installment lenders, pay day lenders, and other predatory credit providers. This rule is an addition to the Military Lending Act, an Act passed in 2006 that capped interest rates and add-on fees to members of the military and their families to 36 percent. When the law was implemented in 2007, the capped rates applied to a small number of loan types. Because of that loophole in the law, lenders have been able to bypass the law and target servicemembers and their families. When lenders target the members of the military and their families, it could impact their security clearance and jeopardize their careers. The new rule has closed the loophole so that abusive lenders can no longer target servicemembers. Taking a stand against predatory lending will curb the threat to military readiness. “"With this action, the department takes an important stand against companies that can prey on our men and women in uniform. This new rule addresses a range of credit products that previously escaped the scope of the regulation, compromising the financial readiness of our troops,” said Bob Work, Deputy Secretary of Defense. The final rule will: Apply to all high-cost credit products that target to the military, including: payday, auto title, and installment loans that attempted to get around the 2007 law. • Cap interest fees and add-ons to 36 percent for loans issued to servicemembers and their dependents. • Prevent lenders from using junk fees to circumvent the cap on rates and fees. • Prohibit forced arbitration agreements preserving servicemembers’ access to courts. “The Department of Defense took resolute action to protect our nation’s service members from unscrupulous lenders,” said Kalitha Williams Policy Liaison of Policy Matters Ohio. “The •
Director Janet Hales
Senior Staff Attorneys Michael R. Smalz Linda Cook
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final Military Lending Act rule will help ensure safe and sustainable lending products are available to our men and women in uniform, which strengthens our country’s military readiness.” Last year, the Department of Defense found that one out every 10 servicemembers continue to be targeted by high-cost credit designed to evade the Military Lending Act. The final rule is estimated to result in a savings of $14 million a year or more for military members and their families. “Updating the Military Lending Act gives servicemembers and their families the protection they deserve, said Linda Cook, Senior Attorney at the Ohio Poverty Law Center. “Cracking down on abusive lending will ensure that payday lenders and others no longer threaten the military with predatory loans.” The new rule is slated to take effect on October 1, and can be found here:https://onedrive.live.com/view.aspx?resid=DB3152109FBA07C6!8971&ithint=file%2cpdf &app=WordPdf&authkey=!AC-RblGvZJ3v4eA. Ohio Poverty Law Center Statement About MLA Rule
