Servicemembers- You Protect Our Country, You Deserve Protection

Servicemembers- You Protect Our Country, You Deserve Protection

Under Federal law, the Military Lending Act (MLA) provides special protections for active duty servicemembers, including active Guard or active Reserve duty members, servicemember’s spouses and  certain dependents.  These protections extend to Payday loans, deposit advance products, tax refund anticipation loans, vehicle title loans; overdraft lines of credit, installment loans (other than residential mortgages, auto loans secured by the motor vehicle being purchased or personal property loans secured by the personal property you are buying), some student loans, and credit cards.

These protections include a 36% interest cap on the above identified loans.  You cannot be charged more than a 36% Military Annual Percentage Rate (MAPR).  In determining the total percentage rate, the Act includes in its calculations finance charges, credit insurance premiums, add on credit related products, application and other related fees.

Additionally, a creditor cannot require a servicemember to submit to arbitration or give up certain rights provided under state and federal law like the Servicemembers Civil Relief Act.  The loan cannot require the servicemember his or her access to the court or waiver to a jury trial.  Further, cannot require the servicemember borrower to create a voluntary military allotment in order to get the loan; secure credit using a post-dated check, access to a bank account (other than at an interest rate of less than 36 percent MAPR), or a car title (other than with a bank, savings association or credit union); or refinance payday loans with new loans.  Finally, the lender cannot charge a penalty for or prohibit early repayment of the loan.  

The above information was found at, 10 U.S.Code sec. 987;