Active duty determination

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    Sometimes we do a renewal on a current loan and add new money to it. We use the same loan number but just add money to the balance. Do we need to do a new determination to verify if the borrower is on active duty or does the determination made at the time of the original loan still apply?


    Per 32 CFR 232:
    A creditor may conclusively determine whether credit is offered or extended to a covered borrower, and thus may be subject to 10 U.S.C. 987 and the requirements of this part, by assessing the status of a consumer in accordance with this paragraph (b).

    Covered borrower means a consumer who, at the time the consumer becomes obligated on a consumer credit transaction or establishes an account for consumer credit, is a covered member (as defined in paragraph (g)(2) of this section) or a dependent (as defined in paragraph (g)(3) of this section) of a covered member.

    You first need to determine if the transaction is a new transaction (e.g. refinancing rather than renewal of existing obligation). Look to Regulation Z, 1026.20 to determine if the transaction is a refinance (see 1026.20(a)(4) regarding new amounts financed). If the transaction is not a new transaction and is simply a renewal then I don’t believe this would be considered a new obligation or extension of credit and would not require a new covered borrower determination. However, if there is any question surrounding whether a transaction is actually a renewal or a refinance I recommend taking the conservative approach and do the covered borrower determination.


    On June 27, 2019, the Defense Manpower Data Center (DMDC) will make significant changes to the Military Lending Act (MLA) website to enhance security of the site and better protect the personal information of Service members. All users of the site will be required to create user accounts. A user account will be required to access both the Single Record Request and the Multiple Record Request capabilities of the MLA site. No search for active service on the MLA website will be possible without a user account.

    In addition to the username, password, company name, and challenge questions currently required to create a user account, beginning June 27, 2019, new MLA website users will be required to supply the user’s first name, last name, address, and e-mail address in order to create their user account.

    Starting around mid-August 2019, existing MLA website users will be required to update their accounts with the additional fields.

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