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#2243998 - 10/13/20 09:42 PM MLA Covered Loan Checklist
TeamComply Offline
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We have only done a few of these (MLA covered loans), so to ensure compliance we are looking to implement the use of a checklist to ensure all the additional requirements, disclosures, etc. have been met and that all the prohibited loan terms have been excluded. Does anyone have an MLA checklist they use to review individual covered MLA loans? If so, would you be willing to share?

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#2244210 - 10/17/20 03:02 PM Re: MLA Covered Loan Checklist TeamComply
rlcarey Online
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Google: sterling compliance upload military lending act

They have a checklist that might help you put something together.
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#2244243 - 10/19/20 03:50 PM Re: MLA Covered Loan Checklist TeamComply
TeamComply Offline
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Done! Thanks for the suggestion rlcarey.

I did have a question regarding one item I found on the checklist, wondered if you might be able to help me? One checklist item included states: "Does the institution refrain from using the title of a vehicle as security for the obligation involving consumer credit?"

What MLA requirement/prohibition does this question stem from???

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#2244247 - 10/19/20 04:09 PM Re: MLA Covered Loan Checklist TeamComply
rlcarey Online
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Well, a vehicle title loan is a covered loan under the MLA - so the normal prohibition would apply, such as 36% cap, no prepayment penalties, etc..
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#2244285 - 10/19/20 11:56 PM Re: MLA Covered Loan Checklist TeamComply
rainman Offline
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That question would not apply to a bank or credit union or S&L. It refers to 32 CFR 232.8, which prohibits creditors from taking a vehicle title as collateral in a covered transaction. Its intent is to prohibit title loans, but it excludes federally insured lenders (because the DOD recognized that banks, s&ls, and CUs often do refinancings or other non-predatory loans secured by a vehicle title. Purchase money loans aren't affected by this prohibition because they aren't covered transactions.
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#2244292 - 10/20/20 12:37 PM Re: MLA Covered Loan Checklist TeamComply
Helpcompliance Offline
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I have found the SCRA and MLA Quick Reference Guide from Bankers Online very helpful.

https://www.bankersonline.com/sites/default/files/tools/scra-mla-QR-16-09.pdf

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#2257559 - 08/03/21 01:35 PM Re: MLA Covered Loan Checklist rlcarey
dmk124 Offline
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This might be a silly question but we are "refinancing" a vehicle loan from a credit union. This is not technically a purchase so would this be covered under MLA?
Collateral/security is the same vehicle.
Last edited by dmk124; 08/03/21 01:36 PM.
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#2257561 - 08/03/21 01:38 PM Re: MLA Covered Loan Checklist TeamComply
rlcarey Online
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#2257562 - 08/03/21 01:57 PM Re: MLA Covered Loan Checklist TeamComply
dmk124 Offline
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State "Loans expressly intended to finance a vehicle that are secured by the vehicle" does not differentiate between "refinance" or "purchase" so I am going with not covered under MLA.

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#2257568 - 08/03/21 03:05 PM Re: MLA Covered Loan Checklist TeamComply
dmk124 Offline
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Now I am second guessing myself, another area states "Is the credit expressly intended to finance the purchase of a motor vehicle
and is the loan secured by that vehicle"

Am I reading too much into the phrases "purchase" and "refinance" ?!?

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#2257577 - 08/03/21 04:34 PM Re: MLA Covered Loan Checklist TeamComply
raitchjay Offline
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OK
A loan to purchase a motor vehicle that doesn't exceed the purchase price is exempt. A refinance is not.
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