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February 26, 2008 - NASCUS responded to a request for comments from the Department of Defense (DoD) in a letter filed February 25. State regulators continue to provide guidance to the DoD on enforcement and implementation of consumer lending regulations to the military.
The DoD requested comments for a report to Congress on the treatment of additional financial products as well as guidance on enforcement of the consumer lending regulations to the military. Regulation 32 CFR 232 was made effective on October 1, 2007, implementing the Defense Authorization Act of 2007.
NASCUS suggests that the DoD take additional time to determine if further regulation is necessary before considering the inclusion of other products in the regulation. The current regulation applies to payday, title and tax anticipation products. NASCUS states that an expanded regulation could be problematic and cited a primary concern about the availability of credit to military members and their families. “We believe that rules cannot regulate the infinite possibilities of potential adverse acts without limiting available credit options to military personnel,” said NASCUS.
Further, NASCUS encourages financial education and a robust complaint process to curb abuses. NASCUS believes potential problems can be effectively controlled by working closely with state regulators to address complaints and by focusing on financial awareness and education programs for military personnel.
“NASCUS encourages the DoD to continue to work closely with financial regulators to address and correct any additional problems with financial products affecting military personnel,” stated the NASCUS comment letter. “Rest assured that state regulators will continue to work to address any complaints on behalf of military families.”
NASCUS and state regulators will continue discussion with the DoD on implementation and enforcement of the consumer lending regulations to the military. NASCUS and the DoD are developing Memoranda of Understanding (MOUs) between state agencies and the Department to facilitate the information sharing critical to enforcement.
To view the full letter, click here.
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