Topic: Military Lending Act (MLA)
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We know that the Military Lending Act (MLA) does not preempt state laws that provide service members with greater protections. Are there any such laws in Illinois?
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Yes, there are several Illinois laws that provide military members greater protections than the federal Military Lending Act that should be on your radar. For example, the Illinois Human Rights Act has made military status a protected class, providing broader protection than its counterpart federal law. In addition, the Illinois Service Member Civil Relief Act…
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We are considering not offering military service members any of the products covered by the revised Military Lending Act, but military status is a protected class in Illinois. Does the Military Lending Act preempt Illinois fair lending laws? If there is no preemption, can we avoid fair lending issues by declining to offer MLA-covered products to all customers?
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No, the Military Lending Act (MLA) does not preempt the Illinois Human Rights Act, which protects borrowers based on their military status. The MLA preempts inconsistent state laws and regulations, but not state laws or regulations that provide service members more protection. In this case, the Illinois law provides broader protection for military members than…
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Is the APR calculation the correct way to calculate interest on a residential mortgage under the Servicemembers Civil Relief Act (SRCA)? Does the 6% interest rate cap include the cost of credit life and credit accident and health insurance?
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No, the APR calculation is not the correct way to calculate the total interest on a residential real estate loan under the SCRA. The SCRA limits the maximum interest rate on loans to active duty military service members to 6%. “Interest” is defined broadly to include all service charges, renewal charges, fees, or any other…
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Will vacant lot loans be covered by the updated Military Lending Act rules that become effective on October 3, 2016?
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Yes, the amended Military Lending Act rules will cover a consumer-purpose loan secured by a vacant lot, unless the loan purpose is to finance the initial construction of a dwelling on the vacant lot. In general, the amended Military Lending Act rules cover all consumer-purpose loans, with several specific exemptions, including an exemption for residential…