Summary: | The Department of Defense (DoD) has adopted the attached final rule implementing § 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007, known as the Talent Amendment. The final rule regulates the terms of certain credit extensions to active duty service members and their dependents. The law and rules take effect October 1, 2007. Additional protections for military personnel provided by the Servicemembers Civil Relief Act and other federal laws are also discussed below. |
Highlights:
Continuation of FIL-83-2007
Distribution:
Suggested Routing:
Attachments: Department of Defense, 32 C.F.R. Part 232, "Limitations on Terms of Consumer Credit Extended to Service Members and Dependents," Final Rule
Note:
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html . Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).
Financial Institution Letters
Consumer Protection: Service Members
The Department of Defense (DoD) has published the attached final rule stipulating the terms of certain credit extensions to active duty service members and their dependents ("covered borrowers"). The rule covers payday loans, motor vehicle title loans, and tax refund anticipation loans, as defined by DoD, and applies to all persons engaged in the business of extending such credit and their assignees. For these defined transactions with covered borrowers ("covered transactions"), the DoD rule:
The DoD rule provides:
The DoD rule prohibits:
The rule further limits or restricts:
Creditors offering any covered transactions are subject to criminal and civil penalties if they violate the rule. Moreover, consumer credit contracts that are not in compliance with the rule will be deemed void from inception. The final rule will take effect on October 1, 2007, and will apply to covered transactions that are consummated on or after that date. All creditors that offer any covered transactions are expected to be in full compliance by October 1, 2007.
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