The survey of credit unions with significant military membership – conducted by the Credit Union National Association (CUNA) and the Defense Credit Union Council (DCUC) — found that the MLA rule is proving burdensome to most credit unions.
Almost 60 percent of respondents stated that the MLA rule is either “very difficult” (15 percent) or “somewhat difficult” (43 percent) to comply with. Nearly 60 percent of responding credit unions either “moderately” (32 percent) or “strongly” (27 percent) believe the MLA rule and guidance is unclear and needs further clarification.
The survey also revealed that the ratio of personal unsecured loans per service member decreased whereas the trend in the data for the five previous years suggested an increase would have occurred.
While only 47 percent of non-military credit unions experienced decreases in their portfolios for payday alternative loans (PALs) between the 4th quarter of 2015 and the 4th quarter of 2016, 86 percent of military credit unions experienced decreases in their portfolios for PALs during this same period.
CUNA and DCUC believe the harm to service members caused by the elimination of PALs can be mitigated by a complete exemption of PALs from the MLA rule.