A move by the Pentagon to update the Military Lending Act of 2006 could result in service members and their families getting interest rates capped on everything from credit cards to vehicle title loans. According to the Department of Defense:
The new proposed actions are designed to apply the protections of the Military Lending Act to all forms of payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-end lines of credit, and credit cards.
Consumer Financial Protection Bureau director Richard Cordray released a statement saying the proposed changes to the Military Lending Act of 2006 would close loopholes in the law used by predatory lenders to scam service members:
"As one of the agencies charged with enforcing the Military Lending Act, we have seen firsthand how lenders use loopholes in the rule to prey on members of the military. This proposal would shut down the predatory lending to the military that has flourished through exploiting legal technicalities.”
But Bill Himpler, a spokesman for American Financial Services Association, a trade group for payday loan companies, told the Military Times the Pentagon hasn't produced sufficient evidence that installment loans hurt service members, and thus the loans shouldn't be included in the Military Lending Act update.
On Monday, the Federal Register published the proposed changes online, to allow for public comment. You can check it out by clicking here.