Limitations on Terms of Consumer Credit Extended to Service Members and Dependents-Military Lending Act Database; Notice of Database Update
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Abstract
The Department of Defense (the Department) is providing notice to the public of a scheduled change to the Military Lending Act (MLA) Database. This update adds cadets and midshipmen attending Military Service Academies of the Armed Forces, who are covered borrowers under the MLA, to the population of covered borrowers identified in the MLA database, thereby correcting an error in the database's original development. The MLA applies to consumer credit extended to members of the Armed Forces and their dependents, as enacted by Congress in the National Defense Authorization Act for Fiscal Year 2013. The MLA statute requires the Secretary of Defense to prescribe regulations to carry out the MLA, and such regulations were published on July 22, 2015. This change to the MLA database is administrative in nature and does not change the current MLA regulation nor does it change the status of the cadets and midshipmen attending the Military Service Academies of the Armed Forces. Therefore, this announcement is not subject to notice and comment rulemaking under the Administrative Procedures Act (APA).
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<title>Federal Register, Volume 86 Issue 245 (Monday, December 27, 2021)</title>
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[Federal Register Volume 86, Number 245 (Monday, December 27, 2021)]
[Notices]
[Page 73263]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-28034]
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DEPARTMENT OF DEFENSE
Office of the Secretary
Limitations on Terms of Consumer Credit Extended to Service
Members and Dependents--Military Lending Act Database; Notice of
Database Update
AGENCY: The Office of the Under Secretary of Defense for Personnel and
Readiness, Department of Defense (DoD).
ACTION: Notice of database update.
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SUMMARY: The Department of Defense (the Department) is providing notice
to the public of a scheduled change to the Military Lending Act (MLA)
Database. This update adds cadets and midshipmen attending Military
Service Academies of the Armed Forces, who are covered borrowers under
the MLA, to the population of covered borrowers identified in the MLA
database, thereby correcting an error in the database's original
development. The MLA applies to consumer credit extended to members of
the Armed Forces and their dependents, as enacted by Congress in the
National Defense Authorization Act for Fiscal Year 2013. The MLA
statute requires the Secretary of Defense to prescribe regulations to
carry out the MLA, and such regulations were published on July 22,
2015. This change to the MLA database is administrative in nature and
does not change the current MLA regulation nor does it change the
status of the cadets and midshipmen attending the Military Service
Academies of the Armed Forces. Therefore, this announcement is not
subject to notice and comment rulemaking under the Administrative
Procedures Act (APA).
DATES: This change to the database will be effective February 1, 2022.
FOR FURTHER INFORMATION CONTACT: Andrew Cohen, (703) 692-5286.
SUPPLEMENTARY INFORMATION: The MLA statute and regulation applies to
consumer credit extended to members of the armed forces and their
dependents, otherwise known as a ``covered borrower'' as enacted by
Congress in the National Defense Authorization Act for Fiscal Year
2013. The MLA statute requires the Secretary of Defense to prescribe
regulations to carry out 10 U.S.C. 987. The Secretary of Defense
prescribed required regulations published in 32 CFR part 232 on July
22, 2015.
In prescribing regulations to implement the statute, the Department
provided creditors an optional safe harbor provision if they
conclusively determined whether credit is offered or extended to a
``covered borrower'', and thus may be subject to 10 U.S.C. 987 and the
requirements of this part, by assessing the status of a consumer in
accordance with the regulation. See 32 CFR 232.5. A ``covered
borrower'' is a consumer who, at the time the consumer becomes
obligated on a consumer credit transaction or establishes an account
for consumer credit, is a ``covered member'' or a dependent of a
covered member. See 32 CFR 323.3. The regulation provides a creditor
two methods to conclusively determine whether credit being offered or
extended to an individual is a covered borrower for the purpose of the
MLA.
These methods are:
A. The use of the Department's MLA database. ``[A] creditor may
verify the status of a consumer by using information relating to that
consumer, if any, obtained directly or indirectly from the database
maintained by the Department, available at <a href="https://www.dmdc.osd.mil/mla/welcome.xhtml">https://www.dmdc.osd.mil/mla/welcome.xhtml</a>. A search of the Department's database requires the
entry of the consumer's last name, date of birth, and Social Security
number.'' See 32 CFR 232.5(b)(2)(i)(A). Or,
B. The use of a consumer report from a nationwide consumer
reporting agency. ``To determine whether a consumer is a covered
borrower, a creditor may verify the status of a consumer by using a
statement, code, or similar indicator describing that status, if any,
contained in a consumer report obtained from a consumer reporting
agency that compiles and maintains files on consumers on a nationwide
basis, or a reseller of such a consumer report (as each of those terms
is defined in the Fair Credit Reporting Act (15 U.S.C. 1681a) and any
implementing regulation (12 CFR part 1022)).'' See 32 CFR
232.5(b)(2)(ii).
While the cadets and midshipmen of the military academies of the
armed forces meet the requirement of being a ``member of the armed
forces who is serving on--``(i) Active duty pursuant to title 10, title
14, or title 32, United States Code, under a call or order that does
not specify a period of 30 days or fewer'', they are currently not
included in the population of the MLA database as they should be. This
change remediates that condition.
Dated: December 20, 2021.
Aaron T. Siegel,
Alternate OSD Federal Register, Liaison Officer, Department of Defense.
[FR Doc. 2021-28034 Filed 12-23-21; 8:45 am]
BILLING CODE 5001-06-P
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