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MCUA Urges Credit Union Exemption from Defense Proposal

The Missouri Credit Union Association (MCUA) takes remarks by DoD and others that certain types of lenders continue to alter their products and services in order to evade the important protections of the MLA. However, because credit unions are not predatory lenders, MCUA urges DoD to exempt credit unions from any modifications to DoD's rule concerning limitations on terms of consumer credit extended to service members and their dependents. The increased costs and unintended consequences of the proposal, especially on smaller credit unions, could negatively impact the delivery of high-quality, reasonably priced financial products and services to our troops, their families and their dependents.

From MCUA's perspective as credit unions' advocates, any changes to the current rules should curtail and eliminate the unscrupulous business practices of organizations targeting our military personnel—not credit unions that do not engage in abusive practices and are heavily regulated by Federal and/or State supervisory agencies.

In addition, MCUA's letter asks DoD to ensure the proposed changes will not adversely affect credit unions' ability to make loans under NCUA's Payday Alternative Loan (PAL) program. MCUA also asks that DoD refrain from making changes to the process by which creditors determine whether a consumer is a "covered borrower" using the Defense Manpower Data Center (DMDC) database, if DoD does not exempt credit unions from the proposal.