By, Gina Ellis
As discussed in an earlier post, institutions are provided with a new safe harbor for identification of covered borrowers under the Military Lending Act (MLA), effective October 3, 2016. An institution that relies upon the MLA database maintained by the Department of Defense and/or upon a nationwide consumer credit reporting agency to verify borrower status and comply with recordkeeping requirements is deemed to have made a conclusive determination with respect to the transaction or account, provided it retains adequate record of the information obtained from those sources.
The Pentagon’s Defense Manpower Data Center database provides support for single or batched verification requests through its website with a 24-hour response time. Alternatively, for a quicker response, an institution may directly access the DMDC database. What few of us realized, however, is that institutions opting to rely upon direct access of the Department of Defense database were required to register with the DOD by February 1!
Good news though! The ABA requested and obtained an extension on the registration deadline. Accordingly, ABA Daily Newsbytes for February 1, 2016 stated that in order to access the database directly, bankers must email firstname.lastname@example.org by Feb. 15. Bankers may include a subject line stating, “Request of [bank name] for direct connection to the DMDC database to determine military status” and repeating the request, along with the bank’s full name, address and contact information in the body of the email.
Questions? Feel free to contact an ABS representative. We’re here for you.