Military Lending Act Examination Procedures Revised by CFPB

The CFPB recently issued their revised Military Lending Act Examination Procedures. 

These are the procedures examiners will use in identifying consumer harm and risks related to the Military Lending Act rule, which was updated in July 2015. The exam procedures provide guidance to industry on what the CFPB will be looking for during reviews covering the amended regulation.

According to the CFPB announcement, “…examinations will evaluate financial institutions’ compliance management systems and overall efforts to follow the rule’s requirements. Specifically, examiners will consider an institution’s implementation plan, including actions taken to update policies, procedures, and processes; its training of appropriate staff; and its handling of early implementation challenges. The Bureau also expects institutions to ensure servicemembers and other eligible consumers are receiving the consumer protections afforded by the Military Lending Act. Risks to consumers resulting from Military Lending Act violations are significant, and the CFPB will exercise its enforcement authority in appropriate cases of substantial consumer harm.

For most forms of credit subject to the updated Military Lending Act rule, creditors are required to comply with the amended regulation as of October 3, 2016; credit card providers must comply with the new rule as of October 3, 2017.”

The revised Military Lending Act exam procedures are based on the approved Federal Financial Institutions Examination Council procedures. This interagency effort helps promote a consistent regulatory experience for industry.

A copy of the Department of Defense’s Military Lending Act rule can be found here: https://www.gpo.gov/fdsys/pkg/FR-2015-07-22/pdf/2015-17480.pdf .