What Are the Rights Guaranteed under the Military Lending Act?

A class-action litigator and partner at Kaliel PLLC, Jeffrey Douglas Kaliel has been involved in cases resulting in millions of dollars in settlements and judgments. Jeffrey Douglas Kaliel is a former staff sergeant in the U.S. Army, and through Kaliel PLLC he represents service members against predatory lending practices covered by the Military Lending Act (MLA).

The MLA is a piece of legislation that provides certain rights to active-duty service members and their covered dependents. A key feature of the MLA is a 36 percent military annual percentage rate cap. The cap includes the costs of finance charges, credit insurance premiums, add-on products, and application or participation fees, with some exceptions.

It also forbids creditors from requiring service members to submit to mandatory arbitration or give up certain rights provided by local and federal laws. In addition, creditors cannot require a voluntary deduction from a service member’s military pay as a condition for a loan. The act also prohibits creditors from charging a penalty if a service member chooses to pay back part, or all, of the loan earlier than contracted.