The Military Lending Act was passed in 2007 to protect all active military personnel from predatory lending practices – this would be payday loans, car title loans and refund anticipation loans.
It also protects active National Guard or Reserve personnel, and their dependents.
The MLM provisions are as follows:
– Caps annual interest rates for consumer credit to military borrowers at 36 percent including all fees and charges, credit insurance premiums and other ancillary charges.
– Prohibits lender from securing a consumer credit loan to a military borrower with a personal check, debit authorization, wage allotment, or title to a vehicle.
– Requires written and oral disclosure of interest rates and payment obligations before loan is issued.
Retains the following legal rights for borrowers:
- States must enforce their own laws to protect military families stationed within their borders.
- Lenders cannot require mandatory arbitration or unreasonable notice provisions in the event of a dispute with borrowers.
- Lenders cannot require that borrowers waive their right to legal recourse under any law, including the Service members Civil Relief Act.
– Prohibits rollovers, or same-creditor refinances, renewals or consolidations.
– Makes violations a misdemeanor and preserves remedies including awarding of damages and voiding of contracts.
If you are struggling with payday loan debt give us a call 1-877-280-5100 and talk to one of our payday consolidation experts.
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