Letter to Reps. Shiver, Heck re: Amendment #249 to the National Defense Authorization Act

May 14, 2015


The Honorable Steve Stivers

1022 Longworth House Office Building

United States House of Representatives

Washington, DC 20515


The Honorable Denny Heck

425 Cannon House Office Building

United States House of Representatives

Washington, DC 20515


Dear Congressmen Stivers and Heck,


On behalf of the Consumer Bankers Association (CBA), we sincerely appreciate your bi-partisan effort on Amendment

#249 to the National Defense Authorization Act (NDAA) that recognizes the significance of having a reliable Defense Manpower Data Center at the Department of Defense (Department) to fulfill the requirements of the Military Lending Act.


The Department’s proposal to amend its regulation implementing the Military Lending Act (MLA) will significantly expand the scope of the MLA protections by reaching new types of creditors and credit products.1    While the original focus of the MLA has been on payday and auto title loans, the proposal expands far beyond payday loans, to include credit cards, personal loans, overdraft lines of credit, car and boat refinances, and student loans.  This means that for every application for these loans, creditors must inquire at least twice before extending a loan to any person.  Failure to do so risks draconian consequences, including prison.


One of the more troubling issues on the proposal is a requirement that creditors access the Department’s database to determine military status for each credit application in order to determine whether certain oral disclosures must be provided and whether the applicant is ineligible for the loan due to military status.  As such, a reliable database is critical to a lender’s ability to comply with this provision. However, the current database is unreliable, often inaccessible, and is likely to be less reliable when the volume increases exponentially to an estimated 450 to 700 million inquiries a year. The proposal would also require lenders to check the database for military spouses and dependents, which are not currently listed.


Failure to be able to access the database will mean that loans to any applicant (military and non-military) will be unable to proceed until the database is available.  As you can imagine, this would have a catastrophic effect on consumer lending in the U.S. and as your amendment identifies, the functionality and reliability of the database is critical to ensuring continued access to beneficial credit.


CBA has worked closely with the Department over the years to ensure appropriate safeguards are in place to protect servicemembers and their spouses and dependents from engaging in specific financial transactions the Department considers harmful, while at the same time avoiding prohibitions that might segregate servicemembers and their spouses and dependents or deny them access to needed and beneficial mainstream credit products.


Again, we appreciate your bi-partisan work on this issue and encourage your colleagues to support Amendment #249. Sincerely,


Richard Hunt

President and CEO

Consumer Bankers Association



1 Limitations on Terms of Consumer Credit Extended to Service Members and Dependents, 79 Fed. Reg. 58,602 (Sept. 29, 2014).