The Department of Defense (DoD) is reported to have rejected the request of the National Association of Federally-Insured Credit Unions (NAFCU) to extend the October 3, 2017 date for credit card compliance with the Military Lending Act (MLA).

In July 2015, the Department of Defense (DoD) published a final rule that dramatically expanded the MLA’s scope.  The final rule provided that until October 3, 2017, consumer credit covered by the MLA did not include credit extended in a credit card account under an open-end (not home-secured) consumer credit plan.  It also allowed the DoD to extend the exemption for credit cards for an additional year.

This past March, the NAFCU sent a letter to the DoD in which it sought a one-year extension of the exemption.  In its letter, the NAFCU pointed to the challenges created by the rule’s application to credit cards and indicated that additional regulatory clarity was needed.

NAFCU reported yesterday that it had received a letter responding to its request from Virginia Penrod, Chief of Staff in the Office of the Undersecretary of Defense, stating that the DoD would not delay the October 3 compliance date at this time.

The DoD’s final rule extended the MLA’s 36 percent interest cap and other restrictions to a host of additional products, including credit cards, installment loans, private student loans and federal student loans not made under Title IV of the Higher Education Act, and all types of deposit advance, refund anticipation, vehicle title, and payday loans (but residential mortgages and purchase-money personal property loans are excluded).  Although the final rule was effective on October 1, 2015, it required creditors to comply with the rule with respect to consumer credit transactions or accounts that were consummated or established on or after October 3, 2016 for most products other than credit cards .