Military Lending Act

The Military Lending Act, or MLA, says that military members cannot be charged an interest rate higher than 36 percent on most types of consumer loans and provides other significant rights.

The MLA applies to active duty service members (including those on active Guard or active Reserve duty) and covered dependents.

Rights under the MLA include:

• 36% interest cap

• No mandatory waivers of consumer protection laws
  A creditor can’t require a servicemember to submit to mandatory arbitration or give up certain rights under state or federal laws.

• No mandatory allotments
  A creditor can’t require a servicemember to create a voluntary military allotment in order to get the loan. An allotment is an automatic amount of money taken from a member's paycheck.

• No prepayment penalty
  A creditor can’t charge a penalty if the member pays back part – or all – of the loan early.

If a military member has an issue with a consumer loan, the member can submit a complaint to the Consumer Financial Protection Bureau.