MLA Covered Borrower Status – Are you Ready for Oct. 3?
Beginning October 3, 2016, the burden will now be on financial institutions—not applicants—to confirm an applicant’s MLA covered borrower status in accordance with the changes made to the Military Lending Act (MLA) of 2006. The following questions can help you determine if this change applies to your financial institution.
- Do you provide consumer credit to Active Duty Servicemembers or their dependents?
- Do you originate installment loans, unsecured open-end lines of credit, payday loans, refund anticipation loans, or deposit advance loans?
- Do you want a streamlined option to receive covered borrower status on applicable applicants?
If you answered yes to any of these questions, then you may need an MLA Covered Borrower Status solution.
Certifying an applicant’s covered borrower status directly through the Defense Manpower Data Center (DMDC) MLA database or through a nationwide Consumer Reporting Agency (CRA) will be required for safe harbor. As this certification adds one more step to your lending process, the more efficiently you can fulfill this requirement, the better.
As a nationwide CRA, Equifax can provide you with an indicator of covered borrower status in a streamlined fashion along with a consumer credit report, or standalone without a credit report. For most Equifax customers, adding our MLA Covered Borrower Status to your current origination process requires minimal coding to update the input and accept the new MLA output segment response.
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