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MLA Disclosures in a Centralized Environment

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Question: 
Our consumer lending is centralized in a lending unit and not done by our branch staff. The branch will not have access to the credit report to know if the borrower is covered under MLA. Does this mean that we will have to provide verbal disclosure to all applicants in case they are covered borrowers? If so, is there model language available that we can provide to our branches?”
Answer: 

Under the MLA the oral and written disclosures are one part of the
requirements but the second is verification of military/dependent status. There are only two ways to do this and have a safe harbor based on the information received. 1) you check the DMDC-MLA database directly (which is browser based) or 2) you get the information from a Credit Reporting Agency (CRA) which gets the data from the DMDCMLA database. The remote branch staff will need 1 or 2 (or both) if the bank wants a safe harbor. Otherwise you’d either disclose MLA required information to all covered loans, or have a safety and soundness risk that exposes the bank and staff to penalties.

First published on 05/17/2020

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