NASCUS Submits Follow-Up Information to Joint Military Lending Act Comment Letter

December 26, 2014 On Dec. 26, the National Association of State Credit Union Supervisors (NASCUS), together with the African American Credit Union Coalition (AACUC), Credit Union National Association (CUNA), and the Defense Credit Union Council (DCUC) submitted a separate filing to its Dec. 22 joint Military Lending Act (MLA) comment letter.

The supplemental information provides some responses to the Department of Defense’s (DoD) specific questions, and includes:

  1. Examples of Small Dollar Alternative Products Offered by Credit Unions Operating on DoD Installations Worldwide (From August 2013)
  2. Examples of Credit Union Programs during the 2013 Sequestration; and
  3. Examples of Credit Union Programs during the 2013 Government Shutdown.

The Dec. 22 comment letter, which was submitted by NASCUS, AACUC, CUNA and DCUC in addition to the National Association of Federal Credit Unions (NAFCU), concerned the Limitations on Terms of Consumer Credit Extended to Service Members and Dependents, which implements the MLA. The DoD’s rule on consumer credit for service members and their dependents has been supported by the credit union system since its issuance in 2007. “However,” the joint comment notes, “because credit unions are not predatory lenders, they should be exempt from any modifications to DoD’s rule concerning limitations on terms of consumer credit extended to service members and their dependents.”

Citing credit unions’ highly regulated and relatively limited operations, as well as their regular examinations by the National Credit Union Administration and/or the credit unions’ state supervisory authority, the credit union system said credit unions should be exempted “completely from the proposed changes, including new coverage under and expanded definition of ‘consumer credit,’ which would apply to certain open-end credit products. In this case, credit unions would remain covered by the existing MLA rule.”

The credit union system also pointed out that there should be an exemption for NCUA’s Payday Alternative Loans (PALs) program. “It is critical that DoD work in close collaboration with NCUA to ensure that PALs can continue to be offered by credit unions and are properly excluded from the proposed changes,” the joint comment notes.

The Dec. 22 letter and the separate Dec. 26 filing were NASCUS’ first joint filings with credit union trade associations.


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