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Guidance on Military Lending Act

mlaOn August 26, 2016, the Department of Defense issued an Interpretive Rule to help clarify questions regarding the amended Military Lending Act (MLA). The amended rules take effect on October 3, 2016 – just three short weeks away! The MLA, as implemented by the Department, limits the military annual percentage rate (MAPR) that a creditor may charge to a maximum of 36 percent, requires certain disclosures and provides other substantive consumer protections on “consumer credit” extended to Service members and their families.

The Interpretive Rule provides clarification in the form of a Q & A regarding the following topics:

  • If hybrid purchase money loans fall within the exception to “consumer credit” under the rule
  • The timing of fee waivers/reductions when fees cause the MAPR to exceed 36 percent
  • If assignees receive the same safe harbor protections as the initial creditor
  • How to perform periodic post-closing screening of covered borrowers for open-end credit and not violate the historic lookback prohibition
  • How to meet the requirement to provide disclosures orally
  • If a single credit agreement may be used for loans covered and not covered by the MLA
  • If a creditor may accept a check or set up an auto debit for loans subject to the MLA (and what is still prohibited)
  • Whether a creditor may accept deposit accounts as collateral for loans to a covered borrower
  • If right of offset can be applied to a loan subject to the MLA
  • Other details affecting credit card products

To review the Interpretive Rule, click here.

REMINDER – ALL banks are subject to this amended rule! Are you ready??

If the rules have your head spinning and you still aren’t sure if your bank will be subject to the amended MLA rules, we want to remind you of the two part MLA webinar series available from the IBA. Part 1 covers what loans were covered, the definition of a covered borrower, safe harbor protections, MAPR calculations, disclosure requirements and contract prohibitions and was presented on May 18. This session was recorded and still available on-demand. Part 2 will be presented September 14 at 10 a.m. This session will provide a recap of the rule changes, a detailed review of the Interpretive Rule and an overview of the credit card rules that go into effect in 2017. Don’t miss out! Purchase Part 1 and register for Part 2 today by clicking here!

Fighting Financial Elder Abuse

Stop Elder Abuse Sign

A recent Consumer Financial Protection Bureau report, “Fighting Elder Financial Exploitation Through Community Networks,” emphasizes the importance of collaboration among financial institutions, local law enforcement and adult protective services agencies to stem the multi-billion-dollar elder financial abuse problem.

The report and an associated resource guide for communities emphasized the value of including banks in these partnerships. The Resource Guide recommends that community networks engage with branch managers, compliance officers, community outreach staff and marketers at banks.

ABA Physical Security and Business Continuity Resources

security-lockFrom robberies, to protests, to active shooters, banks must be aware of the various physical threats they face. ABA has resources that will help you identify the physical threats the ABA currently monitors and the various resources available to you in order to help you protect your customers and your employees. Click here for information.

Free cybersecurity resources

CyberSecurityIn recognition of National Cybersecurity Awareness Month in October, ABA has developed a number of resources to help you promote consumer awareness about cybercrime. The campaign materials focus on how consumers can protect themselves, their small businesses, their identities, and their mobile devices online.

The resources — available at aba.com/PRtools — include a social media toolkit to help you communicate with your customers about cybersecurity, customizable tip sheets and news releases.

Also in October, ABA’s Get Smart About Credit Day will include a “protecting your identity” component that will coincide with ABA’s National Cybersecurity Awareness Month efforts. Download the cybersecurity resources.

New HMDA 2018 Resources

CFPBThe Consumer Financial Protection Bureau (CFPB) continues to build its library of resources to assist HMDA reporters in transitioning to the revised HMDA data collection rules that become effective starting January 1, 2018. The CFPB has made available on its website a webinar that provides an overview of the HMDA final rule and addresses institutional and transactional coverage, the data disclosure and submission process, as well as some key dates found in the final rule. In order to facilitate access to this webinar, the CFPB has also provided a method for viewing the video on YouTube.

Also available, is a HMDA transactional coverage chart that may be used when determining whether a transaction is reportable under HMDA. In addition, the CFPB has posted a PDF of the sample demographic data collection form from Appendix B of the HMDA final rule that reporters can use to collect an applicant’s race, sex, ethnicity and age.

The webinar and other implementation resources can be found on the CFPB’s dedicated implementation webpage for HMDA here. Technical questions regarding HMDA may be submitted to the CFPB via email to HMDAHelp@cfpb.gov.

FDIC Newsletter Offers Tips for ‘Money Smart’ Users

moneysmartThe latest issue of the FDIC’s Money Smart News publication provides tips and information for bankers who use the FDIC’s Money Smart curriculum for financial education. Updates include enhancements to Money Smart for small businesses, how to join the Money Smart Alliance, consumer tips on cybersecurity and more. Read Money Smart News.

CFPB Publishes Resources on HMDA Final Rule

The CFPB has published a webinar and other resources on its website to help bankers comply with the HMDA final rule. The resources address institutional and transactional coverage, the data disclosure and submission process and key dates. Bankers can view the webinar on the bureau’s website or on YouTube. Access the resources.