The Military Annual Percentage Rate (MAPR) has been required, for certain transactions, since October 1, 2007. Recent changes to the Department of Defense’s Part 232 has significantly expanded the types of transactions for which an MAPR is needed. The purpose of this is to impose limitations on the cost and terms of certain extensions of credit to Service members and their dependents, and to provide additional protections relating to such transactions.
Effective on October 3, 2016 the Military Lending Act (MLA) final rule:
1) Extends MLA protections, including the 36 percent Military Annual Percentage Rate (MAPR) cap, to a wider range of credit products, including credit cards.
2) Modifies the MAPR to include fees for credit-related ancillary products sold in connection with the credit transaction, finance charges associated with consumer credit, and certain application and participation fees. Also, for credit cards, the MAPR excludes certain fees if bona fide and reasonable.
3) Provides a safe harbor for creditors ascertaining whether a consumer is covered by the final rule’s protections.
4) Modifies the existing prohibition on rolling over, renewing or refinancing consumer credit. Subjects creditors to civil liability and administrative enforcement for MLA violations.
This training manuals covers:
• When and how the MAPR is used; and
• How to calculate the MAPR.
Compliance Resource training manuals are designed to be used when conducting in-house training, whether initial training upon implementation of the new requirement, periodic training for new team members or remedial training for longer-term team members.