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Trades Approve of Final DoD Lending Rule; Little Change from Proposal

Credit union trade associations praised the evenhandedness of the Department of Defense's final rule capping closed-end credit interest rates for members of the military and their families.

By Sarah Snell Cooke | Updated on September 11, 2007

WASHINGTON — Credit union trade associations praised the evenhandedness of the Department of Defense’s final rule capping closed-end credit interest rates for members of the military and their families.

On Aug. 31, the DoD released its final regulation capping interest rates–and creating a new Military APR–at 36% on closed-end credit that is a payday loan, vehicle title loan, or tax refund anticipation loan with an effective date of Oct. 1. The rule was required under the John Warner National Defense Authorization Act for Fiscal Year 2007; the law came about when the media and others honed in on the issue of predatory lending, particularly in areas around military installations where personnel are typically young, financially inexperienced, and not paid much but regularly.

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