Today, the Consumer Financial Protection Bureau (CFPB) released guidelines for payday lenders regarding the Military Lending Act (MLA). These requirements are included in an updated exam manual for the short-term, small-dollar lending industry that the bureau also released today. Requirements outlined in the guidelines include:
- Annual percentage rate (APR), which includes all fees and costs associated with the loan, must be capped at 36 percent for servicemembers
- Payday lenders are forbidden from rolling over loans made to servicemembers unless "the new transaction results in more favorable terms for the servicemember"
- Payday lenders cannot require servicemembers to sign away their consumer rights under state or federal laws, nor can they require servicemembers to waive their rights under the Servicemembers Civil Relief Act, to get a loan or seek resolution of any legal claims in courts
- Payday lenders cannot require military personnel to repay loans by having payments directly deducted under the military allotment system.
For more, read the full press release.