The Consumer Financial Protection Bureau (CFPB) released new rules when it comes to lending by the short-term lending industry to members of the military and their families.  The CFPB made it clear that they will be monitoring lenders to make sure they are following the guidelines.

Here are the new guidelines of the Military Lending Act (MLA):
1. Annual APR (annual percentage rate) is capped at 36%
2. No loan rollovers.  Sometimes short term loans are "rolled over" so that the borrower can continue to make payments, but these payments are essentially fees and this does not reduce the balance at all.  This practice is now banned.
3. No service rights can be signed away.  Some agreements may call for the borrower to give up certain consumer protection rights.  This practice is now banned.  There can be no signing away of consumer rights.
4. Allotments cannot be required.  According to the CFPB, "Under the military allotment system, military personnel can repay their loans by having payments directly deducted from their paycheck before their salary is deposited in their account. When service members pay by allotment, they lose certain consumer protections as well as their flexibility to adjust their budget if a financial emergency comes up."  The MLA bans lenders from requiring military members to pay by the allotment system and gives service members control over how their income is spent.

To see the original release from the CFPB follow this link.