Extend the Military Lending Act to all U.S. consumers?
Even if that proposal doesn’t gain traction, the act seems to have benefitted servicemembers.
The Military Lending Act, first enacted in 2006 and amended in 2015, provides financial protections for active duty servicemembers and their eligible dependents. MLA caps interest rates on consumer loans to 36% (the military APR or MAPR), imposes specific disclosure requirements, and prohibits unfair credit practices to ensure financial health and military readiness.
The Department of Defense enhanced the MLA protections in 2019 by implementing financial literacy training for military personnel on the responsible use of credit, alternatives to high-cost credit products, consumer protection laws, and how and where to report potential violations of consumer rights.
According to the Department of Defense’s July 2021 “Report on the Military Lending Act and the Effects of High Interest Rates on Readiness”, MLA and the military’s financial education efforts are paying off.
“The Department believes the MLA is currently working as intended and that Service members continue to have ample access to necessary credit. Survey results generally reflect decreased use of high-cost credit products and improved financial condition among Service members over time. Engagements with DoD financial educators and counselors indicate fewer seek assistance for financial challenges or debt resulting from high-cost credit products. Military aid societies, which provide financial assistance, similarly report fewer requests for assistance related to high-cost credit products.”
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