Pentagon Gives the Troops a Win
The American Financial Services Association confirmed that the Department of Defense will publish in the Federal Register tomorrow a repeal of Question and Answer #2 of its 2017 Interpretive Rule for the Military Lending Act (MLA). The interpretive rule states that financing a GAP waiver or other credit products as part of a vehicle-finance transaction with active duty military members or their dependents subjects the transaction to the MLA. You can read our joint statement with the National Automobile Dealers Association (NADA) on this announcement here.
AFSA, its members, and sister trade associations had been requesting the Defense Department repeal Q&A #2 for the past two years, as it was in the best interest of service members and their families. We appreciate the hard work and cooperation provided by Congress, the Pentagon and the Trump Administration to ensure that our military servicemembers and their families again have access to the same types of credit-protection products that their fellow citizens buy every day.
It’s also important to note that AFSA has made clear that it supports the intent and those policies within the Military Lending Act that protect and assist our servicemembers and their families from predatory lenders. In the narrow case of Q&A #2, where the policy prescription was actually harming the very people the Pentagon thought it was helping, the Pentagon did the appropriate thing and fixed the problem.
There are those who may claim that in resolving this issue, the MLA has somehow been weakened. This is simply not accurate. AFSA has detailed why this fix was necessary, and why the fix helps service members.
This policy may have been well intentioned, but it wasn’t fair and in the real world it was harming servicemembers’ personal finances.
February 27th, 2020 by Dan Bucherer