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Military Lending Act 

Background

The Military Lending Act1 (MLA), enacted in 2006 and implemented by the Department of 

Defense (DoD), protects active duty members of the military, their spouses, and their 

dependents from certain lending practices.

The DoD regulation2 implementing the MLA contains limitations on and requirements for 

certain types of consumer credit extended to active duty service members and their 

spouses, children, and certain other dependents (“covered borrowers”). Subject to certain

exceptions, the regulation generally applies to persons who meet the definition of a 

creditor in Regulation Z and are engaged in the business of extending such credit, as well as 

their assignees.3

For covered transactions, the MLA and the implementing regulation limit the amount a 

creditor may charge, including interest, fees, and charges imposed for credit insurance, 

debt cancellation and suspension, and other credit-related ancillary products sold in 

connection with the transaction. The total charge, as expressed through an annualized rate 

referred to as the Military Annual Percentage Rate (MAPR)4 may not exceed 36 percent.5

The MAPR includes charges that are not included in the finance charge or the annual 

percentage rate (APR) disclosed under the Truth in Lending Act (TILA).6

In addition, among other provisions, the MLA, as implemented by DoD:

• Provides an optional safe harbor from liability for certain procedures that creditors 

may use in connection with identifying covered borrowers;

• Requires creditors to provide written and oral disclosures in addition to those 

required by TILA;

• Prohibits certain loan terms, such as prepayment penalties, mandatory arbitration 

clauses, and certain unreasonable notice requirements; and

• Restricts loan rollovers, renewals, and refinancings by some types of creditors.

 1 10 U.S.C. 987.

2 32 CFR part 232.

3 32 CFR 232.3(i).

4 The MAPR is calculated in accordance with 32 CFR 232.4(c).

5 32 CFR 232.4(b).

6 The MAPR largely parallels the APR, as calculated in accordance with Regulation Z, with some exceptions to ensure that 

creditors do not have incentives to evade the interest rate cap by shifting fees for the cost of the credit product away from 

those categories that would be included in the MAPR. Generally, a charge that is excluded as a “finance charge” under 

Regulation Z also would be excluded from the charges that must be included when calculating the MAPR. Late payment 

fees and required taxes—i.e., fees that are not directly related to the cost of credit—are examples of items excluded from 

both the APR and the MAPR. But certain other fees more directly related to the cost of credit are typically included in the 

MAPR, but not the APR. The most common examples of these fees—application fees and participation fees—have been 

specifically noted in the regulation as charges that generally must be included in the MAPR, but would not be included in 

the APR under Regulation Z.
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Statutory amendments to the MLA in 2013 granted enforcement authority for the MLA’s 

requirements to the agencies specified in section 108 of TILA.7 These agencies include the 

Board of Governors of the Federal Reserve System, the Consumer Financial Protection 

Bureau (CFPB), the Federal Deposit Insurance Corporation, the National Credit Union 

Administration, the Office of the Comptroller of the Currency, and the Federal Trade 

Commission.

In July 2015, DoD published revisions to the MLA implementing regulation8 that: 

• Extend the MLA’s protections to a broader range of credit products; 

• Modify the MAPR to include certain additional fees and charges;

• Alter the provisions of the optional safe harbor available to creditors for 

identification of covered borrowers; 

• Modify the disclosures creditors are required to provide to covered borrowers;

• Modify the prohibition on rolling over, renewing, or refinancing consumer credit; 

and

• Implement statutory changes, including provisions related to administrative 

enforcement and civil liability for MLA violations (for knowingly violating the MLA, 

there is potential for criminal penalties). 

Previously, the MLA regulation only applied to certain types of credit, namely: narrowly

defined payday loans, motor vehicle title loans, and tax refund anticipation loans with 

particular terms. The current rule defines “consumer credit” subject to the MLA much 

more broadly, generally paralleling the definition in Regulation Z. Some examples of 

additional credit products now subject to MLA protections when made to covered

borrowers include: 

• Credit cards; 

• Deposit advance products; 

• Overdraft lines of credit (but not traditional overdraft services);9 and

• Certain installment loans (but not installment loans expressly intended to finance 

the purchase of a vehicle or personal property when the credit is secured by the 

vehicle or personal property being purchased).

Credit agreements that violate the MLA are void from inception. For most products, 

creditors are required to come into compliance with DoD’s July 2015 rule on October 3, 

2016. For credit card accounts, creditors are not required to come into compliance with 

the rule until October 3, 2017.10

 7 National Defense Authorization Act for Fiscal Year 2013, Pub. L. 112-239, section 662(b), 126 Stat. 1786. 8 80 Fed. Reg. 43560.

9 An overdraft line of credit with a finance charge is a covered consumer credit product when: it is offered to a covered 

borrower; the credit extended by the creditor is primarily for personal, family, or household purposes; it is used to pay an 

item that overdraws an asset account and for which the covered borrower pays any fee or charge; and the extension of 

credit for the item and the imposition of a fee were previously agreed upon in writing.

10 For purposes of the extended compliance date, the credit card accounts must be under an open-end (not homesecured) consumer credit plan. DoD may, by order, further extend the expiration of the limited exemption for credit card 
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Definitions (§ 232.3)

Consumer Credit

Consumer credit is “credit offered or extended to a covered borrower primarily for 

personal, family, or household purposes, and that is: 

• Subject to a finance charge; or 

• Payable by a written agreement in more than four installments.”

The MLA regulation’s definition of “consumer credit” has been amended to align more 

closely with the definition of the same term in Regulation Z. It is DoD’s intent that the term 

as used in the MLA regulation should wherever possible be interpreted consistently with 

Regulation Z. Notably, however, the MLA and the implementing regulation do not apply to 

certain types of loans extended to covered borrowers that are covered by Regulation Z, 

including:

• Residential mortgages (any credit transaction secured by an interest in a dwelling), 

including transactions to finance the purchase or initial construction of a dwelling, 

any refinance transaction, a home equity loan or line of credit, or a reverse 

mortgage;

• Credit transactions expressly intended to finance the purchase of a motor vehicle11

when the credit is secured by the motor vehicle being purchased; and

• Credit transactions expressly intended to finance the purchase of personal property 

when the credit is secured by the property being purchased. 

Note: A transaction where a creditor simultaneously extends an additional cash 

advance beyond the purchase price of the securing personal property does not fall 

under this last exception. 

Covered Borrower

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 of the armed forces or a dependent of a covered member (as defined in 32 CFR 

232.3(g)(2) and (g)(3)). 

Covered members of the armed forces include members of the Army, Navy, Marine Corps, 

Air Force, or Coast Guard currently serving on active duty pursuant to title 10, title 14, or 

 accounts to a date not later than October 3, 2018. For all other credit products, a creditor must comply with the 

applicable requirements of the July 2015 rule by October 3, 2016 for all consumer credit transactions or accounts for 

consumer credit consummated or established on or after October 3, 2016.

11 For purposes of the MLA, the term “vehicle” includes any self-propelled vehicle primarily used for personal, family, or 

household purposes for on-road transportation. The term does not include motor homes, recreational vehicles (RVs), golf 

carts, or motor scooters.
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title 32 of the U.S. Code under a call or order that does not specify a period of 30 days or 

fewer, or such a member serving on Active Guard and Reserve duty as that term is defined 

in 10 U.S.C. 101(d)(6). 

The term dependent refers to a covered member’s:

• Spouse;

• Children under age 21; 

• Children under age 23 enrolled full-time at an approved institution of higher 

learning and dependent on a covered member (or dependent at the time of the 

member’s or former member’s death) for over one-half of their support; or

• Children of any age incapable of self-support due to mental or physical incapacity 

that occurred while a dependent of the covered member under the preceding two 

bullets and dependent on a covered member (or dependent at the time of the 

member’s or former member’s death) for over one-half of their support.

Other relationships may also qualify an individual as a dependent of a covered member. 

Paragraphs (E) and (I) of 10 U.S.C. 1072(2) reference other relationships that qualify 

individuals as dependents under the MLA.

Per 32 CFR 232.2(a)(1), the regulation does not apply to a credit transaction or account 

relating to a consumer who is not a covered borrower at the time that he or she becomes 

obligated on a credit transaction or establishes an account for credit. Additionally, the 

regulation does not apply to a credit transaction or account (which would otherwise be 

consumer credit) relating to a consumer once the consumer no longer is a covered 

borrower.

Creditor

Except as provided in 32 CFR 232.8(a), (f), and (g), a creditor under the MLA is a person 

who is:

• Engaged in the business of extending consumer credit;12 or

• An assignee of a person engaged in the business of extending consumer credit with 

respect to any consumer credit extended. 

With respect to 32 CFR 232.8(a) only (relating to limitations on rollovers, renewals, 

repayments, refinancings, and consolidations), the term creditor means a person engaged 

in the business of extending consumer credit subject to applicable law to engage in 

deferred presentment transactions or similar payday loan transactions. However, 

pursuant to 232.8(a), the term does not include a person that is chartered or licensed 

under Federal or State law as a bank, savings association, or credit union. 

 12 For the purposes of this definition, a creditor is engaged in the business of extending consumer credit if the creditor 

considered by itself and together with its affiliates meets the transaction standard for a “creditor” under Regulation Z 

with respect to extensions of consumer credit to covered borrowers.
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With respect to 32 CFR 232.8(f) only (relating to limitations on the use of a vehicle title as 

security), the term creditor does not include a person that is chartered or licensed under 

Federal or State law as a bank, savings association, or credit union. 

With respect to 32 CFR 232.8(g) only (relating to limitations on requiring establishment of 

an allotment as a condition for extending credit), the term creditor does not include a 

“military welfare society,” as defined in 10 U.S.C. 1033(b)(2), or a “service relief society,” as 

defined in 37 U.S.C. 1007(h)(4).

Military Annual Percentage Rate (MAPR)

The MAPR is the cost of the consumer credit expressed as an annual rate, calculated in 

accordance with 32 CFR 232.4(c) (see “Terms of Consumer Credit Extended to Covered 

Borrowers (Calculation of MAPR) (§ 232.4)” for more information about calculating the 

MAPR). The MAPR for covered transactions must not exceed 36 percent.13

Short-Term, Small Amount Loan

Under certain circumstances, an application fee for a short-term, small amount loan may be 

excluded when calculating the MAPR (see “Terms of Consumer Credit Extended to Covered 

Borrowers (Calculation of MAPR) (§ 232.4)” for more information about calculating the 

MAPR). A short-term, small amount loan is a closed-end loan that is—

• Subject to and made in accordance with a Federal law (other than the MLA) that 

expressly limits the rate of interest that a Federal credit union or an insured 

depository institution may charge on an extension of credit, provided that the 

limitation set forth in that law is comparable to a limitation of an annual percentage 

rate of interest of 36 percent; and

• Made in accordance with the requirements, terms, and conditions of a rule, 

prescribed by the appropriate Federal regulatory agency (or jointly by such 

agencies), that implements the Federal law described in the paragraph above, 

provided further that such law or rule contains—

o A fixed numerical limit on the maximum maturity term, which term shall not 

exceed nine months; and

o A fixed numerical limit on any application fee that may be charged to a 

consumer who applies for such closed-end loan.

Terms of Consumer Credit Extended to Covered Borrowers (Calculation of MAPR)

(§ 232.4)

Types of Fees to Include in MAPR Calculation

 13 The regulation also prohibits an institution from imposing an MAPR except as authorized by applicable Federal or State 

law. Depending on the type of institution, different Federal or State laws may govern the maximum rates and fees an 

institution may impose for consumer credit transactions covered by the regulation, but in no instance may such rates and 

fees exceed the 36-percent MAPR cap contained in the regulation.
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Under the MLA, a creditor may not impose an MAPR greater than 36 percent in connection 

with an extension of consumer credit that is closed-end credit or in any billing cycle for 

open-end credit. For credit card accounts, creditors are not required to comply with DoD’s 

July 2015 rule until October 3, 2017.

The following charges included in the MAPR (“charges”) must be included in the calculation 

of the MAPR for both closed- and open-end credit, as applicable:

• Any credit insurance premium or fee, any charge for single premium credit 

insurance, any fee for a debt cancellation contract, or any fee for a debt suspension 

agreement; 

• Any fee for a credit-related ancillary product sold in connection with the credit 

transaction for closed-end credit or an account for open-end credit; and

• Except for a bona fide fee (other than a periodic rate) charged to a credit card 

account, which may be excluded if the bona fide fee is reasonable: 

o Finance charges associated with the consumer credit;

o Any application fee charged to a covered borrower who applies for consumer 

credit, other than an application fee charged by a Federal credit union or an 

insured depository institution when making a short-term, small amount loan

provided that the application fee is charged to the covered borrower not 

more than once in any rolling 12-month period (see note below); and

o In general, any fee imposed for participation in any plan or arrangement for 

consumer credit. (See “No Balance During a Billing Cycle” section below for 

more information on the MAPR calculation rules when there is no balance 

during a billing cycle for open-end credit). 

These charges are to be included in the MAPR calculation even if they would be excluded 

from the calculation of the finance charge under Regulation Z.

Note: One application fee charged by a creditor making a short-term, small amount 

loan can be excluded from the computation of the MAPR under the conditions noted 

in the definition of a short-term, small amount loan. However, if a creditor charges a 

second application fee to a covered borrower who applies for a second short-term, 

small amount loan within a rolling 12-month period, then that second fee (and any 

subsequent application fees charged during that period) is not eligible for the 

exclusion and must be included when computing the MAPR for that loan.

Computing the MAPR for Closed-End Credit

For closed-end credit, the MAPR shall be calculated following the rules for calculating and 

disclosing the “Annual Percentage Rate (APR)” for credit transactions under Regulation Z 

based on the MAPR charges listed above. See Examination Checklist for the types of fees 

that would be included or excluded from the MAPR calculation. 
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Computing the MAPR for Open-End Credit

Generally, the MAPR for open-end credit should be calculated following the rules for 

calculating the effective annual percentage rate for a billing cycle as set forth in 12 CFR 

1026.14(c) and (d) of Regulation Z14 (as if a creditor must comply with that section) based 

on the charges listed above. 

Even if a fee is otherwise eligible to be excluded under 12 CFR 1026.14(c) and (d), the 

amount of charges related to opening, renewing, or continuing an account must be included 

in the calculation of the MAPR to the extent those charges are among those in the above

“Types of Fees to Include in MAPR Calculation”.

No Balance During a Billing Cycle. For open-end credit, if the MAPR cannot be calculated in 

a billing cycle because there is no balance in the billing cycle, a creditor may not impose any 

fee or charge during that billing cycle, except that the creditor may impose a fee for 

participation in any plan or arrangement for that open-end credit so long as the 

participation fee does not exceed $100.00 annually, regardless of the billing cycle in which 

the participation fee is imposed. 

Note: the $100.00-per-year limitation on the amount of the participation fee does 

not apply to a bona fide participation fee charged to a credit card account consistent 

with 32 CFR 232.4(d). 

Creditors may impose fees or charges that are excluded from the calculation of the MAPR 

during a particular billing cycle where there is no balance during the billing cycle. For 

example, if a creditor charged a late fee for a late payment in accordance with its credit 

agreement with the covered borrower and in compliance with Regulation Z, the creditor 

may charge the fee, regardless of whether there is a balance in the billing cycle, because a 

late fee is not among the charges that are included in the calculation of the MAPR.

Bona Fide Fees Charged to a Credit Card Account, Generally. For consumer credit extended 

in a credit card account under an open-end (not home-secured) consumer credit plan, a 

bona fide fee, other than a periodic rate, is not a charge required to be included in the 

MAPR calculation, provided the fee is both bona fide and reasonable for the type of fee. 

There is no exclusion for “bona fide fees” on accounts that are not credit card accounts. 

The exclusion for bona fide fees on credit card accounts does not apply to the following 

fees: 

 14 Sections 1026.14(c) and (d) of Regulation Z provide for the methods of computing the APR under several scenarios, 

such as: (1) when the finance charge is determined solely by applying one or more periodic rates; (2) when the finance 

charge during a billing cycle is or includes a fixed or other charge that is not due to application of a periodic rate, other 

than a charge with respect to a specific transaction; and (3) when the finance charge during a billing cycle is or includes a

charge relating to a specific transaction during the billing cycle.
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• Any credit insurance premium or fee, including any charge for single premium 

credit insurance, any fee for a debt cancellation contract, or any fee for a debt 

suspension agreement; or 

• Any fee for a credit-related ancillary product sold in connection with the credit 

transaction for closed-end credit or an account for open-end credit.

Note: A minimum interest charge on a credit card account that is generally 

disclosed in an account-opening table can be a bona fide fee excludable from the 

MAPR calculation if it meets the conditions for exclusion. 

To assess whether a bona fide fee is “reasonable,” the fee must be compared to fees 

typically imposed by other creditors for the same or a substantially similar product or 

service. This comparison is designed to be an “elementary like-kind standard,” as 

illustrated in the examples below:

 

Example #1: When assessing a bona fide cash advance fee, that fee must be 

compared to fees charged by other creditors for transactions in which consumers 

receive extensions of credit in the form of cash or its equivalent. 

Example #2: When assessing a foreign transaction fee, that fee may not be compared 

to a cash advance fee because the foreign transaction fee involves the service of 

exchanging the consumer’s currency (e.g., a reserve currency) for the local currency 

demanded by a merchant for a good or service, and does not involve the provision of 

cash to the consumer. 

It is generally permissible to consider benefits provided by credit card rewards programs 

in determining whether a fee is reasonable overall. For participation fees, the rule gives 

additional guidance for determining whether a fee is reasonable: if the amount of the fee 

reasonably corresponds to the credit limit in effect or credit made available when the fee is 

imposed, to the services offered under the credit card account, or to other factors relating 

to the credit card account. 

Example #3: Even if other creditors typically charge $100.00 annually for 

participation in credit card accounts, a $400.00 fee nevertheless may be reasonable 

if (relative to other accounts carrying participation fees) the credit made available 

to the covered borrower is significantly higher or additional services or other 

benefits are offered under that account. 

Bona Fide Fees Charged to a Credit Card Account, Safe Harbor. The regulation provides a 

firm, yet flexibly adaptable safe harbor standard for a “reasonable” amount of a bona fide 

fee on a credit card account. A bona fide fee is reasonable if the amount of the fee is less 

than or equal to an average amount of a fee for the same or a substantially similar product 

or service charged by five or more creditors each of whose U.S. credit cards in force is at 

least $3 billion in an outstanding balance (or at least $3 billion in loans on U.S. credit card 

accounts initially extended by the creditor) at any time during the three-year period 

preceding the time such average is computed. Creditors may use publicly available 
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information regarding credit cards in force and/or fees charged on those credit cards, such 

as Securities and Exchange Commission filings, Consolidated Reports of Condition and 

Income, agreements posted on the CFPB’s website 

(http://www.consumerfinance.gov/credit-cards/agreements/), agreements posted on 

creditors’ own websites, or commercially compiled sources of information. For purposes of 

choosing creditors for comparison, note that a creditor may meet the $3 billion threshold 

even if the creditor has sold the credit card loans to a special-purpose vehicle or entered 

into another arrangement so that securities backed by the loans may be issued.

A bona fide fee that is higher than an average amount calculated using the safe harbor 

standard also may be reasonable depending on other factors relating to the credit card 

account. A bona fide fee charged by a creditor is not unreasonable solely because other 

creditors do not charge a fee for the same or a substantially similar product or service. 

Effect of Charging Fees on Bona Fide Fees. If a creditor imposes a fee or fees that cannot be 

excluded from the MAPR (see “Types of Fees to Include in MAPR Calculation” ) and imposes 

a finance charge on a covered borrower, the total amount of the fee(s) and finance 

charge(s) shall be included in the MAPR. This does not affect whether another type of fee 

may be excluded as a bona fide fee. 

However, if a creditor imposes any fee (other than a periodic rate or charges that must be 

included in the MAPR) that is not a bona fide fee and imposes a finance charge on a covered 

borrower, the total amount of those fees, including any bona fide fees, and other finance 

charges shall be included in the MAPR. 

Example #1: In a credit card account under an open-end (not home-secured) 

consumer credit plan during a given billing cycle, Creditor A imposes on a covered 

borrower a fee for a debt cancellation product, a finance charge, and a reasonable 

bona fide foreign transaction fee. Only the fee for the debt cancellation product and 

the finance charge must be included when calculating the MAPR. 

Example #2: In a credit card account under an open-end (not home-secured) 

consumer credit plan during a given billing cycle, Creditor B imposes on a covered 

borrower a fee for a debt cancellation product, a finance charge, a reasonable bona 

fide foreign transaction fee, and a bona fide, but unreasonable cash advance fee. All 

of the fees—including the foreign transaction fee that otherwise would qualify for 

the exclusion as a bona fide fee—and the finance charge must be included when 

calculating the MAPR.

Timing for Computing the MAPR for Open-End Credit

Computing. In general, creditors can be reasonably expected to estimate at the outset of a 

billing cycle whether charges to a covered borrower can produce an MAPR in excess of the 

36-percent limit. This is particularly true because the creditor already would know the 

periodic rate and whether the non-periodic fees are covered by the exclusion for a bona 

fide fee under 32 CFR 232.4(d).
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Nevertheless, under certain circumstances, creditors might not know at the outset of a 

billing cycle whether the borrower’s use of an open-end line of credit will lead to a finance 

charge that—through a combination of rates and fees—exceeds the 36-percent limit. 

However, at the end of a billing cycle the creditor would be able to calculate the MAPR and, 

in that same billing cycle, waive fees or periodic charges, either in whole or in part, in order 

to comply with the 36-percent limit. 

MAPR Calculation Examples

The following examples may assist reviewers in calculating the MAPR. 

Example #1: Closed-End Credit. The MAPR for single advance, single payment 

transactions, such as some types of deposit advance loans, must be computed in 

accordance with the rules in Regulation Z, such as by following the instructions 

described in paragraph (c)(5) of appendix J. Based on the formula provided in 

paragraph (c)(5) of appendix J, in the case of a single advance, single payment 

transaction loan extended to a covered borrower for a period of 45 days, and for 

which the advance is $500.00 and the single payment required consists of the 

principal amount plus a finance charge of $28.44, for a total payment of $528.44, the 

MAPR would be 46.14 percent. In this example, the resultant MAPR would exceed 

the 36-percent rate limit. 

Example #2: Open-End Credit (General). Suppose a creditor offers a line of credit to a 

covered borrower primarily for personal, family, or household purposes (commonly 

referred to as a “personal line of credit”), and permits the borrower to repay on a 

monthly basis. Upon establishing the personal line of credit, the covered borrower 

borrows $500.00. The creditor charges a periodic rate of 0.006875 (which 

corresponds to an annual rate of 8.25 percent), plus a fee of $25.00, charged when 

the account is established and annually thereafter. Under these circumstances, 

pursuant to 12 CFR 1026.14(c)(2), the creditor would calculate the MAPR as 

follows: “dividing the total amount of the finance charge for the billing cycle”—

which is $3.44 (corresponding to (0.006875) x ($500)), plus $25.00—“by the 

amount of the balance to which it is applicable”—$500—and multiplying the 

quotient (expressed as a percentage) by the number of billing cycles in a year”—12 

(since the creditor allows the borrower to repay monthly), which is 68.26 percent. 

In this example, even though the periodic rate (0.006875) would comply with the 

interest-rate limit under 32 CFR 232.4(b), the resultant MAPR would be in excess of 

that limit because the amount borrowed is low at the time the annual fee is imposed. 

 

Example #3: Open-End Credit (Credit Card). In the case of a credit card account, a 

creditor likewise would be required to calculate the MAPR using the methods 

prescribed in 12 CFR 1026.14(c) and (d) of Regulation Z. For example, if a creditor 

extends credit to a covered borrower through a credit card account and the 

borrower incurs a finance charge relating to a specific transaction, such as a cash 

advance transaction, during the billing cycle, then the creditor would calculate the 
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MAPR under the instructions set forth in 12 CFR 1026.14(c)(3). However, in the 

case of a credit card account the creditor may exclude, pursuant to 32 CFR 

232.4(c)(1)(iii) and 232.4(d), any bona fide fee from the finance charges that 

otherwise must be accounted for; thus, if a charge for the cash advance transaction 

fits within the exclusion for a bona fide fee under 32 CFR 232.4(d), then that charge 

would not be included when computing the MAPR for that billing cycle. 

 

Identification of Covered Borrowers (§ 232.5)

A creditor is permitted to apply its own method to assess whether a consumer is a covered 

borrower; however, the regulation provides creditors an optional safe harbor from liability 

in conclusively determining whether credit is offered or extended to a covered borrower 

through assessing the status of a consumer by use of either of the following methods:

• Verifying the status of a consumer by using information relating to that consumer, if 

any, obtained directly or indirectly from the DoD’s database, located at 

https://mla.dmdc.osd.mil/ (or via any URL or direct connection to the database that 

may be provided by the DoD). Searches require entry of the consumer’s last name, 

date of birth, and Social Security number. 

Note: Historic lookbacks are prohibited under the rule. After a consumer has 

entered into a transaction or established an account, a creditor (including an 

assignee) may not, directly or indirectly, obtain any information from the DoD 

database to determine whether a consumer had been a covered borrower as of the 

date of a transaction or the date an account was established. However, this 

provision does not prevent creditors from adopting a risk management plan that 

includes periodically screening credit portfolios for other purposes, such as 

determining whether there are changes to covered borrower status.

OR

• Verifying 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 consumer reports, as those terms are defined 

in the Fair Credit Reporting Act (FCRA) and any implementing regulations. 

Note: The consumer reporting agency (CRA) must be a nationwide agency or a 

reseller of reports from such an agency (as both of those terms are defined by the 

FCRA); many specialty CRAs may not qualify.

A creditor’s one-time determination, by using one of the methods provided in 32 CFR 

232.5(b)(2), is permitted and deemed to be conclusive with respect to that transaction or 

account between the creditor and that consumer, so long as the creditor timely creates and 

maintains a record of the information obtained, solely at the time that:
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• The consumer initiates the transaction or 30 days prior to that time;

• The consumer applies to establish the account or 30 days prior to that time; or 

• The creditor develops or processes a firm offer of credit that includes the status of 

the consumer as a covered borrower, so long as the consumer responds to that offer

no later than 60 days after the creditor provides the offer to the consumer.

The MLA rule extends the covered borrower check safe harbor to a creditor’s assignee 

provided that the assignee continues to maintain the original record created by the creditor 

that initially extended the credit. Neither the MLA nor 32 CFR 232 specify how and for how 

long creditors are to maintain these records, noting only that the records must be created 

timely and maintained thereafter.

An action by a creditor within an existing account, such as to increase the available credit 

that a consumer may draw upon, does not alter the status of the creditor’s prior 

determination for that account. However, in order to benefit from the optional safe harbor 

provisions, a creditor must use one of the safe harbor methods when extending a new 

consumer credit product or newly establishing an account for consumer credit, including a 

new line of consumer credit that might be associated with a pre-existing transactional 

account held by the borrower (for example, when a consumer applies for an overdraft line 

of credit associated with an existing checking account).

Mandatory Loan Disclosures (§ 232.6)

If a creditor extends consumer credit (including any consumer credit originated or 

extended through the internet) to a covered borrower, the creditor must provide the 

covered borrower with certain information before or at the time the borrower becomes 

obligated on the transaction or establishes an account for the consumer credit:

• A statement of the MAPR applicable to the extension of consumer credit;

• Any disclosure required by Regulation Z, which shall be provided only in accordance 

with the requirements of Regulation Z that apply to that disclosure; and

• A clear description of the payment obligation of the covered borrower, as applicable. 

Note that a payment schedule (in the case of closed-end credit) or account-opening 

disclosure (in the case of open-end credit) provided pursuant to Regulation Z

satisfies this requirement.

A creditor may satisfy the requirement to provide a statement of the MAPR by describing 

the charges the creditor may impose, in accordance with the regulation and subject to the 

terms and conditions of the agreement, relating to the consumer credit to calculate the 

MAPR. A creditor is not required to describe the MAPR as a numerical value or to describe 

the total dollar amount of all charges in the MAPR that apply to the extension of consumer 

credit. A creditor may include a statement of the MAPR applicable to the consumer credit 

in the agreement with the covered borrower involving the consumer credit transaction. 

The regulation does not require a statement of the MAPR to be included in advertisements.
13

Under 32 CFR 232.6(c)(3), a statement substantially similar to the following model 

statement may be used to satisfy the requirement to provide a statement of the MAPR:

Federal law provides important protections to members of the Armed 

Forces and their dependents relating to extensions of consumer credit. 

In general, the cost of consumer credit to a member of the Armed 

Forces and his or her dependent may not exceed an annual percentage 

rate of 36 percent. This rate must include, as applicable to the credit 

transaction or account: The costs associated with credit insurance 

premiums; fees for ancillary products sold in connection with the credit 

transaction; any application fee charged (other than certain application 

fees for specified credit transactions or accounts); and any 

participation fee charged (other than certain participation fees for a 

credit card account).

If a transaction involves more than one creditor, then only one of those creditors must 

provide the required disclosures. The creditors may agree among themselves which 

creditor will provide the statement of the MAPR and the clear description of the payment 

obligation.

15

The statement of the MAPR and the clear description of the payment obligation must be 

provided in writing in a form the covered borrower can keep. A creditor shall also provide 

such required information orally.16 A creditor may satisfy the requirement to provide oral 

disclosures if the creditor provides:

• The information to the covered borrower in person; or

• A toll-free telephone number in order to deliver the oral disclosures to a covered 

borrower when the covered borrower contacts the creditor for this purpose.

If a creditor elects to provide a toll-free telephone number in order to deliver the oral 

disclosures, the toll-free telephone number must be included on:

• A form the creditor directs the consumer to use to apply for the transaction or 

account involving consumer credit; or

• The written disclosure the creditor provides to the covered borrower.

The oral disclosures provided through the toll-free number need only be available for a 

duration of time reasonably necessary to allow a covered borrower to contact the creditor 

for the purpose of listening to the disclosure. A creditor may orally provide a clear 

description of the payment obligation of the covered borrower by providing a general 

description of how the payment obligation is calculated or a description of what the 

borrower’s payment obligation would be based on an estimate of the amount the borrower 

may borrow. For example, a creditor could generally describe how minimum payments are 

 15 32 CFR 232.6(b)(2). 16 32 CFR 232.6(d)(2).
14

calculated on open-end credit plans issued by the creditor and then refer the covered 

borrower to the written materials the borrower will receive in connection with opening the 

plan. Alternatively, a creditor could choose to generally describe borrowers’ obligations to 

make a monthly, bi-monthly, or weekly payment as the case may be under the borrowers’ 

agreements. The requirement of a clear, oral payment obligation disclosure has sufficient 

breadth that creditors may choose a variety of acceptable oral disclosure compliance 

strategies. A generic oral description of the payment obligation may be provided, even 

though the disclosure is the same for borrowers with a variety of consumer credit 

transactions or accounts.

If Regulation Z would allow a creditor to provide a required disclosure after the borrower 

has become obligated on a transaction, as in the case of purchase orders or requests for 

credit made by mail, telephone, or fax under 12 CFR 1026.17(g), the disclosures required 

by the MLA may be provided at the time prescribed in Regulation Z. A creditor is required 

to provide new disclosures for the refinancing or renewal of consumer credit only when 

the transaction for that credit would be considered a new transaction that requires 

disclosures under Regulation Z.

The statement of the MAPR and the clear description of the payment obligation, as 

described above, need to be provided to a covered borrower only once for the transaction 

or the account established for consumer credit with respect to that borrower.

Limitations (§ 232.8) 

The MLA imposes a number of limitations upon creditors in connection with consumer 

credit extended to covered borrowers. 

Rollovers and certain other actions. It is unlawful for a creditor to roll over, renew, repay, 

refinance, or consolidate any consumer credit extended to the covered borrower by the 

same creditor with the proceeds of other consumer credit extended by that creditor to the 

same covered borrower. 

For the purposes of this paragraph, the term “creditor” means a person engaged in the 

business of deferred presentment transactions or similar payday loan transactions (as 

described in the relevant law), provided however, that the term does not include a person 

that is chartered or licensed under Federal or State law as a bank, savings association, or 

credit union. 

Note: This prohibition does not apply to a transaction when the same creditor 

extends consumer credit to a covered borrower to refinance or renew an extension 

of credit that was not covered by this paragraph because the consumer was not a 

covered borrower at the time of the original transaction. 

Terms Relating to Dispute Resolution. A creditor cannot require a covered borrower to:
15

• Waive the covered borrower’s right to legal recourse under any otherwise 

applicable provision of Federal or State law, including any provision of the 

Servicemembers Civil Relief Act;17

• Submit to arbitration or other onerous legal notice provisions in the case of a 

dispute; or 

• Give unreasonable notice as a condition for legal action.

Payment Terms and Conditions – General. A creditor cannot:

• Use the title of a vehicle as security for the obligation involving the consumer credit. 

Note that for the purposes of this paragraph, the term “creditor” does not include a 

person that is chartered or licensed under Federal or State law as a bank, savings 

association, or credit union;

• Require as a condition for the extension of consumer credit that the covered 

borrower establish an allotment to repay the obligation (note that for the purposes 

of this paragraph only, the term “creditor” shall not include a “military welfare 

society,” as defined in 10 U.S.C. 1033(b)(2), or a “service relief society,” as defined in 

37 U.S.C. 1007(h)(4)); or 

• Prohibit the borrower from prepaying the consumer credit or charge a penalty fee 

for prepaying all or part of the consumer credit.

Payment Terms and Conditions – Account Access. A creditor cannot use a check or other 

method of access to a deposit, savings, or other financial account maintained by the 

covered borrower, except that, in connection with a consumer credit transaction with an 

MAPR not exceeding the 36-percent limit, a creditor may:

• Require an electronic fund transfer to repay a consumer credit transaction, unless 

otherwise prohibited by law;

• Require direct deposit of the consumer’s salary as a condition of eligibility for 

consumer credit, unless otherwise prohibited by law; or

• If not otherwise prohibited by applicable law, take a security interest in funds 

deposited after the extension of credit in an account established in connection with 

the consumer credit transaction.

This section prohibits a creditor from using the borrower’s account information to create a 

remotely created check or remotely created payment order in order to collect payments on 

consumer credit from a covered borrower. Similarly, a creditor may not use a post-dated 

check provided at or around the time credit is extended that deprives the borrower of 

control over payment decisions, as is common in certain payday lending transactions. 

However, the prohibition on account access does not in any way prevent covered 

borrowers from tendering a check or authorizing access to a deposit, savings, or other 

financial account to repay a creditor. Section 232.8(e) also does not prohibit a covered 

borrower from authorizing automatically recurring payments, provided that such 

recurring payments comply with other laws, including the Electronic Fund Transfer Act 

 17 50 U.S.C. 3901 et seq.
16

and its implementing regulations, such as 12 CFR 1005.10, as applicable. The prohibition 

in 32 CFR 232.8(e) also does not prohibit covered borrowers from granting a security 

interest to a creditor in the covered borrower’s checking, savings, or other financial 

account, provided that it is not otherwise prohibited by applicable law and the creditor 

complies with the MLA regulation including the 36-percent limitation on the MAPR.

Savings Clauses. A creditor may include a proscribed term under section 232.8, such as a 

mandatory arbitration clause, within a standard written credit agreement with a covered 

borrower, provided that the agreement includes a contractual “savings” clause limiting the 

application of the proscribed term to only non-covered borrowers, consistent with any 

other applicable law.
17

Examination Objectives

1. Determine the institution’s compliance with the provisions of 32 CFR 232, as 

applicable.

2. Assess the quality of the institution’s compliance risk management systems and its 

policies and procedures for implementing the provisions.

3. Determine the reliance that can be placed on the institution’s internal controls and 

procedures for monitoring the institution’s compliance with the provisions.

4. Determine corrective action when violations of law are identified or when the 

institution’s policies, procedures, or internal controls are deficient.

Examination Procedures

Determine Applicability of the Regulation 

1. Determine if the creditor offers or purchases consumer credit covered by 32 CFR 

232.

• If the creditor does not offer or purchase the types of credit that would be 

consumer credit within the meaning of the MLA, the regulation does not apply 

and no further review is necessary;

• If the creditor offers or purchases any of the types of credit that would be 

consumer credit within the meaning of the MLA, use the following procedures to 

determine whether the creditor complies with the MLA. 

The following flowchart may be helpful in determining MLA applicability to a particular 

extension of credit to a covered borrower:
18
19

Evaluate Compliance Management System

2. Determine the extent and adequacy of the institution’s policies, procedures, and 

practices for ensuring and monitoring compliance with the MLA.

3. Determine the extent and adequacy of the training received by individuals whose 

responsibilities relate to compliance with the MLA. Review any training materials 

pertaining to the MLA and determine whether the training is comprehensive and 

covers the various aspects of the provisions that apply to the creditor’s offerings and 

operations.

4. Determine if the institution has policies or procedures in place to:

• Provide account disclosure information to covered borrowers in accordance 

with 32 CFR 232.6; 

• Correctly determine which fees it charges are required to be included in the 

calculation of the MAPR; 

• Correctly calculate and limit the MAPR (including waiving amounts necessary in 

order to comply with the limit at the outset of a transaction and at the end of a 

billing cycle on open-end credit, as applicable) as defined in 32 CFR 232.3(p) and 

in accordance with 32 CFR 232.4(c); and

• Properly create and maintain records of covered borrower checks.

5. Obtain compliance reviews and/or audit materials, including workpapers and 

reports, to determine if: 

• The scope of any audits address all provisions of the regulation, as applicable;

• Transaction testing includes samples covering all relevant product types and 

decision centers;

• The work performed is accurate;

• Significant deficiencies and their causes are included in reports to management 

or to the board of directors;

• Management has taken corrective actions to follow up on previously identified 

deficiencies; and

• The frequency of review/audit is appropriate (including review/audit of 

implemented corrective action related to previously identified deficiencies).

6. Through discussions with management and review of available information, 

determine whether the institution’s internal controls are adequate to ensure 

compliance. Consider the following:

• Organization charts;

• Process flowcharts;

• Policies and procedures;

• Account documentation;

• Checklists; and

• Computer program documentation, including any computer program testing and 

validation.
20

Identification of Covered Borrowers 

7. Determine whether the creditor’s policies, procedures, and training materials 

accurately reflect the scope of the “covered borrower” definition. 

8. Determine whether the creditor has elected to use one of the optional safe harbor 

methods provided in 32 CFR 232.5(b). If the creditor does not use one of the 

optional safe harbor methods, describe the method, if any, that the creditor uses to 

ensure it does not make covered loans to covered borrowers on prohibited terms.

9. If a creditor elects to use one of the two optional safe harbor methods to check a 

consumer’s status, ascertain whether the creditor timely creates and thereafter 

maintains a record of the information obtained, in accordance with 32 CFR 

232.5(b)(3). 

10. If a creditor elects to use a method other than one of the two optional safe harbor 

methods, determine whether the chosen method is performed prior to a consumer 

becoming obligated on a credit transaction or establishing an account for credit and 

whether the creditor maintains a record of the information obtained.

Note: Section 232.5 contains no specific timing and recordkeeping requirements if 

the creditor uses an alternative to one of the safe harbors to verify covered 

borrower status. However, any alternative method selected by the creditor should 

be evaluated to determine whether it is reasonable and verifiable, and whether it 

addresses the risk of extending consumer credit that does not comply with the MLA 

to a covered borrower. 

11. Regarding an action by a creditor relating to a covered borrower with an existing 

account, if a creditor has elected to use one of the two optional safe harbor methods, 

determine whether the creditor also uses one of the safe harbor methods when 

extending a new consumer credit product or newly establishing an account for 

consumer credit, including a new line of consumer credit that might be associated 

with a pre-existing transactional account held by the borrower.

Calculation of MAPR

12. Determine whether the creditor includes the following charges in the calculation of 

the MAPR for both closed- and open-end credit, as applicable:

• Any credit insurance premium or fee, any charge for single premium credit 

insurance, any fee for a debt cancellation contract, or any fee for a debt 

suspension agreement; 

• Any fee for a credit-related ancillary product sold in connection with the credit 

transaction for closed-end credit or an account for open-end credit; and

• Except for a bona fide fee (other than a periodic rate) charged to a credit card 

account, which may be excluded if the bona fide fee is reasonable for that type of 

fee: 
21

o Finance charges associated with the consumer credit;

o Any application fee charged to a covered borrower who applies for 

consumer credit, other than an application fee charged by a Federal credit 

union or an insured depository institution when making a short-term, 

small amount loan provided that the application fee is charged to the 

covered borrower not more than once in any rolling 12-month period; 

and

o Any fee imposed for participation in any plan or arrangement for 

consumer credit other than as permitted under 32 CFR 232.4(c)(2)(ii)(B). 

13. For closed-end credit, determine whether the creditor appropriately calculates the 

MAPR following the rules for calculating and disclosing the “Annual Percentage Rate 

(APR)” for credit transactions under Regulation Z based on the “Types of Fees to 

Include in MAPR Calculation” above. 

14. For open-end credit, determine whether the creditor appropriately calculates the 

MAPR following the rules for calculating the effective annual percentage rate for a 

billing cycle as set forth in 12 CFR 1026.14(c) and (d) of Regulation Z (as if a 

creditor must comply with that section) based on the “Types of Fees to Include in 

MAPR Calculation” above.

Mandatory Loan Disclosures

15. Determine whether the creditor properly provides the covered borrower with 

required information before or at the time the borrower becomes obligated on the 

transaction or establishes an account for the consumer credit, including:

• A statement of the MAPR applicable to the extension of consumer credit;

• Any disclosure required by Regulation Z, which shall be provided only in 

accordance with the requirements of Regulation Z that apply to that disclosure; 

and

• A clear description of the payment obligation of the covered borrower, as 

applicable. Note that a payment schedule (in the case of closed-end credit) or 

account-opening disclosure (in the case of open-end credit) provided pursuant 

to Regulation Z satisfies this requirement. Also note that for oral disclosures, a 

generic, clear description of the payment obligation is permissible.

16. Determine whether the creditor provides the statement of the MAPR and the clear 

description of the payment obligation both in writing in a form the covered 

borrower can keep and orally.

17. If the creditor elects to provide a toll-free telephone number in order to deliver the 

oral disclosures to a covered borrower, determine whether the toll-free telephone 

number is included on either:

• A form the creditor directs the consumer to use to apply for the transaction 

or account involving consumer credit; or 

• The written disclosure the creditor provides to the covered borrower.
22

18. If the creditor elects to provide a toll-free telephone number in order to deliver the 

oral disclosures to a covered borrower, determine whether the toll-free telephone 

number is available for a duration of time reasonably necessary to allow a covered 

borrower to contact the creditor for the purpose of listening to the disclosure.

Other Limitations

19. Determine whether the creditor abides by the prohibition on rolling over, renewing, 

repaying, refinancing, or consolidating consumer credit. Note that this prohibition 

does not apply to a creditor that is chartered or licensed under Federal or State law 

as a bank, savings association, or credit union, or when the credit is being extended

by the same creditor to refinance or renew an extension of credit that was not 

covered because the consumer was not a covered borrower at the time of the 

original transaction.

20. Determine whether the creditor abides by the prohibitions against requiring

covered borrowers to:

• Waive their rights to legal recourse under any otherwise applicable law;

• Submit to arbitration or other onerous legal notice provisions in the case of a 

dispute; or 

• Provide unreasonable notice as a condition for legal action.

21. Confirm that the creditor does not: 

• Require that a covered borrower repay the obligation by military allotment

(note that for purposes of this provision of the regulation, the term “creditor” 

does not include “military welfare societies” or “service relief societies”);

• Prohibit a covered borrower from prepaying the consumer credit; or 

• Charge a covered borrower a penalty fee for prepaying all or part of the 

consumer credit.

22. Determine whether the creditor abides by the prohibition on using the title of a 

vehicle as security for the obligation involving the consumer credit. Note that this 

prohibition does not apply when the transaction is expressly intended to finance the 

purchase of a vehicle and the credit is secured by the vehicle or when the creditor is 

chartered under Federal or State law as a bank, savings association, or credit union.

23. Determine whether the creditor improperly requires access to a deposit, savings, or 

other financial account maintained by the covered borrower for repayment by:

• Obtaining payment through a remotely created check or remotely created

payment order; or 

• Obtaining a post-dated check provided at or around the time credit is 

extended.
23

Military Lending Act

Examination Checklist

Applicability of the Regulation

1. Does the creditor or assignee offer, extend, or 

purchase credit primarily for personal, family, or 

household purposes?

If the answer is Yes, proceed. If the answer is No or 

N/A, conclude the review.

Yes No N/A

Evaluate Compliance Management System

2. Does the institution have adequate policies, 

procedures, and practices for ensuring and 

monitoring compliance with the MLA?

Yes No N/A

3. Does the institution provide adequate training for 

individuals whose responsibilities relate to 

compliance with the MLA?

Yes No N/A

4. Does the institution have policies or procedures in 

place to:

• Provide account disclosure information to 

covered borrowers in accordance with 32 CFR 

232.6; 

Yes No N/A

• Correctly determine which fees the creditor

charges are required to be included in the 

calculation of the MAPR; 

Yes No N/A

• Correctly calculate and limit the MAPR (including 

waiving amounts necessary in order to comply 

with the limit at the outset of a transaction and at 

the end of a billing cycle on open-end credit, as 

applicable) as defined in 32 CFR 232.3(p) and in 

accordance with 32 CFR 232.4(c); and

Yes No N/A

• Properly create and maintain records of covered 

borrower checks?

Yes No N/A

5. Based on a review of the institution’s compliance 

reviews and/or audit materials, including 

workpapers and reports:

• Does the scope of any audits address all 

provisions of the regulation, as applicable?

Yes No N/A

• Does transaction testing include samples covering 

all relevant product types and decision centers?

Yes No N/A

• Is the work performed accurate? Yes No N/A

• Are significant deficiencies and their causes 

included in reports to management or to the 

board of directors?

Yes No N/A
24

• Has management taken corrective actions to 

follow up on previously identified deficiencies?

Yes No N/A

• Is the frequency of review/audit appropriate 

(including review/audit of implemented 

corrective action related to previously identified 

deficiencies)?

Yes No N/A

6. Are the institution’s internal controls adequate to 

ensure compliance?

Yes No N/A

Identification of Covered Borrowers 

7. Do the creditor’s policies, procedures, and training 

materials accurately reflect the scope of the “covered 

borrower” definition?

Yes No N/A

8. Has the creditor elected to use one of the optional 

safe harbor methods provided in 32 CFR 232.5(b)?

Yes No N/A

9. If a creditor elects to use one of the two optional safe 

harbor methods to check a consumer’s status: 

• Does the creditor timely create a record of the 

information obtained, in accordance with 32 CFR 

232.5(b)(3)?

Yes No N/A

• Does the creditor thereafter maintain a record of 

the information obtained, in accordance with 32 

CFR 232.5(b)(3)?

Yes No N/A

• Regarding an action by a creditor relating to a 

covered borrower with an existing account, does 

the creditor also use one of the safe harbor 

methods when extending a new consumer credit 

product or newly establishing an account for 

consumer credit, including a new line of consumer 

credit that might be associated with a pre-existing 

transactional account held by the borrower?

Yes No N/A

10. If a creditor elects to use a method other than one of 

the two optional safe harbor methods: 

• Is the chosen method performed prior to a 

consumer becoming obligated on a credit 

transaction or establishing an account for credit?

Yes No N/A

• Does the creditor maintain a record of the 

information obtained?

Yes No N/A

Calculation of MAPR

11. Does the creditor include the following charges in the 

calculation of the MAPR for both closed- and openend credit, as applicable:

• Any credit insurance premium or fee, any charge 

for single premium credit insurance, any fee for a 

Yes No N/A
25

debt cancellation contract, or any fee for a debt 

suspension agreement; 

• Any fee for a credit-related ancillary product sold 

in connection with the credit transaction for 

closed-end credit or an account for open-end 

credit; and

Yes No N/A

• Except for a bona fide fee (other than a periodic 

rate) charged to a credit card account, which may 

be excluded if the bona fide fee is reasonable for 

that type of fee: 

o Finance charges associated with the 

consumer credit;

Yes No N/A

o Any application fee charged to a covered 

borrower who applies for consumer credit, 

other than an application fee charged by a 

Federal credit union or an insured 

depository institution when making a 

short-term, small amount loan provided 

that the application fee is charged to the 

covered borrower not more than once in 

any rolling 12-month period; and

Yes No N/A

o In general, any fee imposed for 

participation in any plan or arrangement 

for consumer credit. 

Yes No N/A

12. For closed-end credit, does the creditor appropriately 

calculate the MAPR following the rules for calculating 

and disclosing the “Annual Percentage Rate (APR)” 

for credit transactions under Regulation Z based on 

the MAPR charges?

Yes No N/A

13. For open-end credit, does the creditor appropriately 

calculate the MAPR following the rules for calculating 

the effective annual percentage rate for a billing cycle 

as set forth in 12 CFR 1026.14(c) and (d) of 

Regulation Z (as if a creditor must comply with that 

section) based on the MAPR charges?

Yes No N/A

Mandatory Loan Disclosures

14. Does the creditor properly provide each covered

borrower with required information before or at the 

time the borrower becomes obligated on the 

transaction or establishes an account for the 

consumer credit, (or at a later time provided for in 

Regulation Z, if any), including:

• A statement of the MAPR applicable to the 

extension of consumer credit;

Yes No N/A
26

• Any disclosure required by Regulation Z, which 

shall be provided only in accordance with the 

requirements of Regulation Z that apply to that 

disclosure; and

Yes No N/A

• A clear description of the payment obligation of 

the covered borrower, as applicable. Note that a 

payment schedule (in the case of closed-end 

credit) or account-opening disclosure (in the case 

of open-end credit) provided pursuant to 

Regulation Z satisfies this requirement.

Yes No N/A

15. Does the creditor provide the statement of the MAPR 

and the clear description of the payment obligation 

both in writing in a form the covered borrower can 

keep and orally?

Yes No N/A

16. If the creditor elects to provide a toll-free telephone 

number in order to deliver the oral disclosures to a 

covered borrower, does the creditor include the tollfree telephone number on either: 

• A form the creditor directs the consumer to use to 

apply for the transaction or account involving 

consumer credit; or 

• The written disclosure the creditor provides to 

the covered borrower?

Yes No N/A

17. If the creditor elects to provide a toll-free telephone 

number in order to deliver the oral disclosures to a 

covered borrower, is the toll-free telephone number 

available for a duration of time reasonably necessary 

to allow a covered borrower to contact the creditor 

for the purpose of listening to the disclosure?

Yes No N/A

Other Limitations

18. Does the creditor abide by the prohibition on rolling 

over, renewing, repaying, refinancing, or 

consolidating consumer credit? Note that this 

prohibition does not apply to a creditor that is 

chartered or licensed under Federal or State law as a 

bank, savings association, or credit union, or when 

the credit is being extended by the same creditor to 

refinance or renew an extension of credit that was 

not covered because the consumer was not a covered 

borrower at the time of the original transaction. 

Yes No N/A

19. Does the creditor abide by the prohibitions against 

requiring covered borrowers to: 

• Waive their rights to legal recourse under any 

otherwise applicable law; 

Yes No N/A
27

• Submit to arbitration or other onerous legal 

notice provisions in the case of a dispute; or

Yes No N/A

• Provide unreasonable notice as a condition for 

legal action?

Yes No N/A

20. Does the creditor refrain from:

• Requiring that a covered borrower repay the 

obligation by military allotment (note that for 

purposes of this provision of the regulation, the 

term “creditor” does not include “military welfare 

societies” or “service relief societies”);

Yes No N/A

• Prohibiting a covered borrower from prepaying 

the consumer credit; or

Yes No N/A

• Charging a covered borrower a penalty fee for 

prepaying all or part of the consumer credit?

Yes No N/A

21. Does the creditor refrain from using the title of a 

vehicle as security for the obligation involving the 

consumer credit? Note that this prohibition does not 

apply when the transaction is expressly intended to 

finance the purchase of a vehicle and the credit is 

secured by the vehicle or when the creditor is 

chartered under Federal or State law as a bank, 

savings association, or credit union.

Yes No N/A

22. Does the creditor refrain from improperly requiring

access to a deposit, savings, or other financial account 

maintained by the covered borrower for repayment

by:

• Obtaining payment through a remotely created 

check or remotely created payment order; or

Yes No N/A

• Obtaining a post-dated check provided at or 

around the time credit is extended?

Yes No N/A