The Department of Defense issued new guidance about rules designed to protect service members from predatory lenders, but banks and credit unions are still confused.
Neither mainstream banks nor credit unions were the target of Military Lending Act rules that were announced in July 2015, and go into effect this year and next. Instead, the rules were designed to stop payday lenders, title loan lenders and others that targeted cash-strapped service members and their families with loans with exorbitant interest rates that were easy to get and difficult to escape.
Yet, credit union and banking organizations have watched the rulemaking process carefully for unintended consequences, and issued critiques of a Defense Department guidance statement made public Aug. 26.
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