The Military Lending Act (MLA), codified in 10 U.S.C. § 987 and 32 CFR Part 232, provides vital credit safeguards for active duty service members and their dependents.
1. MLA Protections Summary
- 36% MAPR Cap: Limits the all-inclusive Military Annual Percentage Rate to 36%, including all finance fees, application charges, and debt cancellation premiums.
- Mandatory Defense Manpower Database Check: Lenders must verify borrower military status via the official Department of Defense DMDC database before originating credit.
- Prohibition on Mandatory Allotments: Creditors cannot require service members to establish military pay allotments or submit post-dated checks to secure credit.
- Strict Voidability: Any consumer loan contract executed in violation of MLA statutory requirements is legally void from inception.