Enacted by Congress under 10 U.S.C. 987, the Military Lending Act (MLA) protects active-duty military service members and their dependents from high-cost consumer credit.
1. MLA Statutory Framework
The 36% MAPR Comprehensive Cap
Unlike standard APR, the Military Annual Percentage Rate (MAPR) includes all finance charges, application fees, participation fees, and credit insurance premiums. Total borrowing costs cannot exceed 36% MAPR.
- Prohibited Loan Features: Lenders cannot demand post-dated checks, mandatory wage assignments, pre-dispute arbitration clauses, or vehicle titles as collateral for covered credit.
- Department of Defense Database: All licensed consumer lenders must verify borrower military status via the Defense Manpower Data Center (DMDC) prior to loan origination.