Letter to Credit Unions No.: 16-CU-07
Military Lending Act Examination Approach
October 2016

NCUA issued LTCU 16-CU-07 to provide credit unions information as to NCUA’s examination approach to new Military Lending Act (MLA) regulations that took effect October 3, 2016. NCUA states that it will take the same examination approach used with the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures rule in 2015 and its Qualified Mortgage and Ability-to-Repay rules in 2014.”

NCUA will accept a credit union’s reasonable and good faith efforts to comply with the new rule during the first examination following the implementation date. However, credit unions should understand that NCUA’s acceptance of good faith efforts does not shield a credit union from any the third-party liability that can arise under the MLA.

During the first examination that occurs after October 3, 2016, NCUA field staff will focus on ensuring that a credit union is aware of amendments to the rule and that the credit union is making progress in complying with the rule. NCUA examiners will also assess the quality of a credit union’s compliance risk management systems and its policies and procedures for implementing the program.

NCUA has issued three regulatory alerts on the MLA, providing a guidance summary for compliance:

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