On August 26, 2016, the Department of Defense (“DOD”) issued an interpretive rule (the “Interpretive Rule”) providing guidance on the DOD’s regulations implementing the Military Lending Act (“MLA”). That same day, we published a high-level summary of the Interpretive Rule, noting that the Interpretive Rule aims to clarify certain ambiguities in the DOD’s July 2015 final rule. In this alert, we take a closer look at the Interpretive Rule, which is presented in a series of 19 questions and answers (“Q&As”).

BACKGROUND -

The DOD first finalized rules to implement the MLA in August 2007 (the “2007 Rules”). Under the 2007 Rules, the MLA covered only three types of loans: payday loans, vehicle title loans, and refund anticipation loans. In September 2014, the DOD proposed to vastly expand the scope of the rules to cover new types of creditors and credit products. The DOD finalized its new MLA rules in July 2015 (the “2015 Rules”) largely as proposed. Under the 2015 Rules, the MLA applies to most non-mortgage closed-end and open-end credit, including installment loans, student loans, single-payment loans, lines of credit, and credit cards.