Page 3 of 4 1 2 3 4
Thread Options
#2092575 - 08/10/16 08:12 PM Re: Military Lending Act (MLA) TaraTLR
CULady Offline
Gold Star
Joined: Sep 2007
Posts: 493
WA
As discussed in other threads, you can't do CD/Savings secured loans. So you will still need to be able to check at application for the covered borrower so you are not offering products that they can not have.

Agree with raitchjay. It just doesn't make sense to me to not check at application. For the instances that you don't pull credit, I would do a check on the DOD MLA site. All it takes is a SSN, DOB and last name, click search and you have your result.

But as for the forms, we will have the MLA disclosures on our forms that will be used for all borrowers. Not my preference, but not my call either.

Return to Top
Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#2092578 - 08/10/16 08:14 PM Re: Military Lending Act (MLA) Laurlee
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,468
On the Net
Originally Posted By Laurlee
I do agree to that statement.

The reason I'm considering disclosing the MAPR to all is because we do not always pull new credit reports for loans (e.g CD loans) and we will be charged an additional fee by the Credit Bureau for this check (which we do not pass along to the borrower). So I think we would save time and money by disclosing the MAPR to all applicants on all applicable transactions.

The risk I see with doing this is that we have to make sure our MAPR does not exceed 36% for anyone. However, we could build in our procedures to check the database if MAPR exceeds 36%.

Anyone else considering this approach?


If you made a CD secured loan and the MAPR was <36%, you'd still have a MLA problem if a borrower was covered because you won't, under current interpretations, be able to make that loan under the MLA.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#2092579 - 08/10/16 08:16 PM Re: Military Lending Act (MLA) Andy_Z
RR Sarah Offline
Diamond Poster
RR Sarah
Joined: Mar 2004
Posts: 2,486
Up North
I think we're going to check for military/dependent status at application on every loan. If a covered borrower, procedures would kick in.
_________________________
Sometimes you have to burn a few bridges to keep the crazies from following you.

Return to Top
#2093229 - 08/15/16 04:08 PM Re: Military Lending Act (MLA) TaraTLR
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,238
Just curious, are you going to be checking the military status at application on loans that are exempt transactions?

For example, our indirect lending program would be exempt on all loans. Do we still need to check the database even though these are exempt?

what about commercial loans?
_________________________
CRCM, CAMS

Return to Top
#2093240 - 08/15/16 04:39 PM Re: Military Lending Act (MLA) TaraTLR
Jade'sFire Offline
Gold Star
Jade'sFire
Joined: Apr 2012
Posts: 369
Yaven IV
We will not. If the loan being applied for is not covered by the MLA then a covered borrower check will not be made.
_________________________
"It's time for the Jedi to end."
Luke Skywalker

Return to Top
#2093259 - 08/15/16 05:47 PM Re: Military Lending Act (MLA) Jade'sFire
RR Sarah Offline
Diamond Poster
RR Sarah
Joined: Mar 2004
Posts: 2,486
Up North
I guess it all depends on how the credit bureaus are going to handle this. If military status shows up on all reports, why not check for it then? We are not in a region where we see a lot of service members so it is kind of nice to know about them from the get go. As far as our indirect lending portfolio...not sure if we will check those up front because the purchase transaction wouldn't be covered under MLA but we do check those when the collection process starts so that is just a matter of timing.

Procedures are still in a state of flux though since we are waiting on the September update of our loan processing software before we can test everything.
_________________________
Sometimes you have to burn a few bridges to keep the crazies from following you.

Return to Top
#2093264 - 08/15/16 05:55 PM Re: Military Lending Act (MLA) TaraTLR
Tracey, CRCM Offline
Platinum Poster
Joined: Jul 2015
Posts: 542
Gorham, ME
Does anyone have any sort of implementation checklist and/or draft procedures they can share?
Last edited by Tracey, CRCM; 08/15/16 05:56 PM.
_________________________
Tracey

Return to Top
#2093267 - 08/15/16 06:05 PM Re: Military Lending Act (MLA) TaraTLR
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,238
At this point, my procedures are fairly basic as we are waiting our vendors to inform us if we will be able to pull through the credit bureau.

here is basically what I have covered so far:

1. are they a covered borrower - check CB or DOD site
2. is this a covered loan - examples of exempt transactions and examples of covered loans
3. is the mapr under 36%
4. give proper disclosures - oral and in a form they can keep
_________________________
CRCM, CAMS

Return to Top
#2093268 - 08/15/16 06:06 PM Re: Military Lending Act (MLA) TaraTLR
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,238
We are not checking our indirect loans as they will be exempt under the rule, and our indirect team has a different vendor than retail, mortgage, and commercial (we won't be checking commercial either).
_________________________
CRCM, CAMS

Return to Top
#2093272 - 08/15/16 06:21 PM Re: Military Lending Act (MLA) TaraTLR
Tracey, CRCM Offline
Platinum Poster
Joined: Jul 2015
Posts: 542
Gorham, ME
Thanks bcompliance- do you have a script for the oral disclosure drafted yet? And what are you using to meet the "form they can keep"-
_________________________
Tracey

Return to Top
#2093274 - 08/15/16 06:23 PM Re: Military Lending Act (MLA) TaraTLR
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,701
OK
The script for the oral disclosure can be the model statement:

3) Model statement. A statement substantially similar to the following statement may be used for the purpose of paragraph (a)(1) of this section: "Federal law provides important protections to members of the Armed Forces and their dependents relating to extensions of consumer credit. In general, the cost of consumer credit to a member of the Armed Forces and his or her dependent may not exceed an annual percentage rate of 36 percent. This rate must include, as applicable to the credit transaction or account: The costs associated with credit insurance premiums; fees for ancillary products sold in connection with the credit transaction; any application fee charged (other than certain application fees for specified credit transactions or accounts); and any participation fee charged (other than certain participation fees for a credit card account)."

Won't your LOS have this form with this language?
_________________________
I'm fixin' to fix that.

Return to Top
#2093277 - 08/15/16 06:24 PM Re: Military Lending Act (MLA) TaraTLR
Tracey, CRCM Offline
Platinum Poster
Joined: Jul 2015
Posts: 542
Gorham, ME
That is my problem raitchjay- they can't tell me yet! waiting on updates from them.
_________________________
Tracey

Return to Top
#2093278 - 08/15/16 06:25 PM Re: Military Lending Act (MLA) TaraTLR
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,701
OK
Ahhh.
_________________________
I'm fixin' to fix that.

Return to Top
#2093280 - 08/15/16 06:30 PM Re: Military Lending Act (MLA) TaraTLR
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,238
Thanks bcompliance- do you have a script for the oral disclosure drafted yet? And what are you using to meet the "form they can keep"-

I am hoping that our vendors will have a form that prints, but I am not sure as of now. As of the oral disclosure, they will be reading the paragraph raitchjay cited above.
_________________________
CRCM, CAMS

Return to Top
#2093285 - 08/15/16 06:35 PM Re: Military Lending Act (MLA) bcompliance
RR Sarah Offline
Diamond Poster
RR Sarah
Joined: Mar 2004
Posts: 2,486
Up North
I'm assuming that our software vendor will provide the "form they can keep". As far as the oral disclosure, I'm thinking about having the model notification printed on index cards and laminated for staff so they can have it handy. Just my preliminary thoughts on the oral disclosures though. We won't have a separate 800 number so those calls will be coming in on the bank's general 800 line. I'm thinking I'll probably train staff that answer the phone to provide the oral disclosures but not 100% sure on that.
_________________________
Sometimes you have to burn a few bridges to keep the crazies from following you.

Return to Top
#2093287 - 08/15/16 06:37 PM Re: Military Lending Act (MLA) TaraTLR
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,701
OK
I don't anticipate using an 800 number at all--it just doesn't seem that hard to me to have staff read them the model language at the loan closing.
_________________________
I'm fixin' to fix that.

Return to Top
#2093291 - 08/15/16 06:42 PM Re: Military Lending Act (MLA) TaraTLR
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,238
I can already hear the complaining with the added step in the procedures, but I agree with raitchjay. They can read it to covered borrowers at closing and explain the payment stream. It will take less that 30 seconds. We also don't have enough covered borrowers to justify the 800 number...
_________________________
CRCM, CAMS

Return to Top
#2093421 - 08/16/16 02:33 PM Re: Military Lending Act (MLA) TaraTLR
Tracey, CRCM Offline
Platinum Poster
Joined: Jul 2015
Posts: 542
Gorham, ME
How are you all going to document the delivery of the oral disclosures?
_________________________
Tracey

Return to Top
#2093424 - 08/16/16 02:36 PM Re: Military Lending Act (MLA) TaraTLR
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,701
OK
I don't think we will--i'll put it in our procedures and if questioned about it, i'll hand a copy of the procedures to whomever is asking.
_________________________
I'm fixin' to fix that.

Return to Top
#2093427 - 08/16/16 02:41 PM Re: Military Lending Act (MLA) TaraTLR
ScoutLaRue Offline
Member
Joined: Jul 2016
Posts: 73
Our bank already has our own toll free 800 number that connects to front desk. I thought I heard in an MLA webinar we could use that number and let the borrower know they can have the information read to them by calling it? It seems easier to just add the 800# to the docs, and have the LO let the borrower know they can call.

How many will call?....my guess is zero.

Return to Top
#2093463 - 08/16/16 03:35 PM Re: Military Lending Act (MLA) TaraTLR
bcompliance Offline
Diamond Poster
Joined: Sep 2014
Posts: 1,238
Ditto what raitchjay said.... Procedures.
_________________________
CRCM, CAMS

Return to Top
#2093472 - 08/16/16 03:58 PM Re: Military Lending Act (MLA) TaraTLR
ComplyGuy Offline
100 Club
Joined: May 2015
Posts: 245
Our vendor's written disclosure has a signature line at the bottom that states the borrower acknowledges receiving the written disclosure and that they were provided the disclosure orally. We plan to have that signed.

Return to Top
#2093528 - 08/16/16 05:54 PM Re: Military Lending Act (MLA) TaraTLR
Jade'sFire Offline
Gold Star
Jade'sFire
Joined: Apr 2012
Posts: 369
Yaven IV
Our process is the same as Compliowa. We will keep a signed copy in the file and make sure the borrower gets a copy to keep.
_________________________
"It's time for the Jedi to end."
Luke Skywalker

Return to Top
#2093541 - 08/16/16 06:10 PM Re: Military Lending Act (MLA) TaraTLR
HRH Okie Banker Offline
Power Poster
Joined: Jan 2003
Posts: 3,070
Oklahoma
Our software vendor (they whom shall not be named) tried to inform us that since we didn't currently have any active duty military customers and therefore we did not need the MLA updates at this time and they've put us down for updates during next years' annual update (summer '17).

We challenged this with a accurate explanation of why and it appears that we have now been moved WAY up on the list to being done any day now.
_________________________
Just working here until I get my letter from Hogwarts.

Return to Top
#2093647 - 08/17/16 12:51 PM Re: Military Lending Act (MLA) TaraTLR
peony Offline
Gold Star
peony
Joined: Mar 2013
Posts: 250
we know that we are going to provide the toll-free number with the MAPR statement and the number will give the covered borrower the MAPR statement orally but do we have to provide payment schedule orally as well? The way I read the rule, I was thinking it would be satisfied once you give them the Reg Z disclosures that includes the payment schedule.

Return to Top
Page 3 of 4 1 2 3 4

Moderator:  Andy_Z