On October 17, the FDIC released revised interagency Military Lending Act (MLA) examination procedures for use in connection with consumer credit transactions occurring on or after October 3, 2016. The revised procedures reflect the Department of Defense’s July 2015 final rule and August 2016 interpretive rule and appear consistent with those released by the CFPB and FFIEC last month.
The FDIC also provided guidance on its initial supervisory expectations for examinations relating to MLA compliance. Echoing the words of the CFPB, the FDIC stated that early examinations will focus on financial institutions’ “compliance management systems and overall efforts to come into compliance” with the MLA final rule, and that “examiners will consider an institution’s implementation plan, including actions taken to update policies, procedures, and processes; its training of appropriate staff; and its handling of early implementation challenges.”
Considering the NCUA’s instruction to examiners earlier this month to accept a credit union’s “reasonable and good faith efforts” to comply with the MLA final rule, and the OCC’s Bulletin issued on October 7th, which used language similar to the CFPB regarding initial supervisory expectations, the FDIC has joined what appears to be a growing list of regulators to follow the CFPB’s lead and take a modified approach to early examinations for MLA compliance.
Compliance with the MLA final rule was required for most consumer credit products as of October 3, 2016. For credit extended in a new credit card account under an open-end consumer credit plan, compliance is not required until October 3, 2017.