[Federal Register Volume 86, Number 245 (Monday, December 27, 2021)]
[Notices]
[Page 73263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28034]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Limitations on Terms of Consumer Credit Extended to Service 
Members and Dependents--Military Lending Act Database; Notice of 
Database Update

AGENCY: The Office of the Under Secretary of Defense for Personnel and 
Readiness, Department of Defense (DoD).

ACTION: Notice of database update.

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SUMMARY: The Department of Defense (the Department) is providing notice 
to the public of a scheduled change to the Military Lending Act (MLA) 
Database. This update adds cadets and midshipmen attending Military 
Service Academies of the Armed Forces, who are covered borrowers under 
the MLA, to the population of covered borrowers identified in the MLA 
database, thereby correcting an error in the database's original 
development. The MLA applies to consumer credit extended to members of 
the Armed Forces and their dependents, as enacted by Congress in the 
National Defense Authorization Act for Fiscal Year 2013. The MLA 
statute requires the Secretary of Defense to prescribe regulations to 
carry out the MLA, and such regulations were published on July 22, 
2015. This change to the MLA database is administrative in nature and 
does not change the current MLA regulation nor does it change the 
status of the cadets and midshipmen attending the Military Service 
Academies of the Armed Forces. Therefore, this announcement is not 
subject to notice and comment rulemaking under the Administrative 
Procedures Act (APA).

DATES: This change to the database will be effective February 1, 2022.

FOR FURTHER INFORMATION CONTACT: Andrew Cohen, (703) 692-5286.

SUPPLEMENTARY INFORMATION: The MLA statute and regulation applies to 
consumer credit extended to members of the armed forces and their 
dependents, otherwise known as a ``covered borrower'' as enacted by 
Congress in the National Defense Authorization Act for Fiscal Year 
2013. The MLA statute requires the Secretary of Defense to prescribe 
regulations to carry out 10 U.S.C. 987. The Secretary of Defense 
prescribed required regulations published in 32 CFR part 232 on July 
22, 2015.
    In prescribing regulations to implement the statute, the Department 
provided creditors an optional safe harbor provision if they 
conclusively determined whether credit is offered or extended to a 
``covered borrower'', and thus may be subject to 10 U.S.C. 987 and the 
requirements of this part, by assessing the status of a consumer in 
accordance with the regulation. See 32 CFR 232.5. A ``covered 
borrower'' is a consumer who, at the time the consumer becomes 
obligated on a consumer credit transaction or establishes an account 
for consumer credit, is a ``covered member'' or a dependent of a 
covered member. See 32 CFR 323.3. The regulation provides a creditor 
two methods to conclusively determine whether credit being offered or 
extended to an individual is a covered borrower for the purpose of the 
MLA.
    These methods are:
    A. The use of the Department's MLA database. ``[A] creditor may 
verify the status of a consumer by using information relating to that 
consumer, if any, obtained directly or indirectly from the database 
maintained by the Department, available at https://www.dmdc.osd.mil/mla/welcome.xhtml. A search of the Department's database requires the 
entry of the consumer's last name, date of birth, and Social Security 
number.'' See 32 CFR 232.5(b)(2)(i)(A). Or,
    B. The use of a consumer report from a nationwide consumer 
reporting agency. ``To determine whether a consumer is a covered 
borrower, a creditor may verify the status of a consumer by using a 
statement, code, or similar indicator describing that status, if any, 
contained in a consumer report obtained from a consumer reporting 
agency that compiles and maintains files on consumers on a nationwide 
basis, or a reseller of such a consumer report (as each of those terms 
is defined in the Fair Credit Reporting Act (15 U.S.C. 1681a) and any 
implementing regulation (12 CFR part 1022)).'' See 32 CFR 
232.5(b)(2)(ii).
    While the cadets and midshipmen of the military academies of the 
armed forces meet the requirement of being a ``member of the armed 
forces who is serving on--``(i) Active duty pursuant to title 10, title 
14, or title 32, United States Code, under a call or order that does 
not specify a period of 30 days or fewer'', they are currently not 
included in the population of the MLA database as they should be. This 
change remediates that condition.

    Dated: December 20, 2021.
Aaron T. Siegel,
Alternate OSD Federal Register, Liaison Officer, Department of Defense.
[FR Doc. 2021-28034 Filed 12-23-21; 8:45 am]
BILLING CODE 5001-06-P