Despite the CFPB’s efforts to build support for the Department of Defense’s proposal to significantly expand Military Loan Act coverage, it now appears that the proposal may be put on hold.

The DoD proposal would revise the scope of “consumer credit” subject to MLA restrictions to include, regardless of term or amount, all unsecured open-end lines of credit, credit cards, payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, and installment loans.  It would also shift from service members and their dependents to lenders the responsiblity to screen all loan applicants to determine their military status or dependence on someone in service.  The proposal has drawn strong criticism from the financial services industry.

The source of the hold is a proposal for the Fiscal Year 2016 National Defense Authorization Act  (NDAA) recently released by the House Committee on Armed Services Subcommittee for Military Personnel.  The Subcommittee has proposed to include in the NDAA a provision requiring the DoD to provide a report concerning any MLA rulemaking.   The information that the Subcommittee wants the DoD to provide in the report includes an assessment of the impact on military readiness, if any, resulting from service member access to financial products such as payday and vehicle title loans since the MLA’s implementation in 2007.  A House vote on the NDAA is currently scheduled for May 15.

For more on the proposal’s possible hold, see our legal alert.