12/1/2022

Compliance with the Military Lending Act (MLA) should be at the top of NPA Members to-do list this Holiday Season and in 2023.

Ever since October 3, 2016, when the Department of Defense regulations were extended to cover pawnbrokers, we have been focused on pawnbrokers’ compliance with the Military Lending Act.

There are many reasons we keep hammering away at this topic, including :

1. Alleged violations of the MLA in Illinois are being used to justify extending a 36% APR rate cap to all pawn transactions in that state. Press releases by a Chicago-based, bank-and-fintech-funded nonprofit report on its recent “investigation” and highlighted a single alleged MLA-covered transaction with a “243% interest rate”. They also claim the pawnshop only asked in two of the 13 transactions if the consumer was in the military or a dependent.
2. Recently CFPB Director Chopra again highlighted MLA compliance and enforcement as among his highest priorities.
3. The CFPB sued First Cash and its Cash America West, Inc. subsidiary in 2021 over its alleged failure to comply with the MLA in many transactions in…