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ATTACHMENT C 

Military Lending Act, 10 U.S.C. § 987 
§986 TITLE 10---ARMED FORCES Page 438 

shall prescribe regulations to ensure that a person is not ing any State usury law, to the extent that such 

interred in any military cemetery under the authority of law, rule, or regulation is inconsistent with this 

the Secretary of a military department or provided fu­ section, except that this section shall not pre­ neral honors under section 1491 of title 10, United States empt any such law, rule, or regulation that pro­ Code, unless a good faith effort has been made to determine whether such person is ineligible for such interment vides protection to a covered member or a deor honors by reason of being a person described in sec­ pendent of such a member in addition to the 

tion 2411(b) of title 38, United States Code, or is other­ protection provided by this section. 

wise ineligible for such interment or honors under Fed­ (2) DIFFERENT TREATMENT UNDER STATE LAW 

eral law." OF MEMBERS AND DEPENDENTS PROHIBITED.­

States shall not- [§ 986. Repealed. Pub. L. 110--181, div. A, title X, (A) authorize creditors to charge covered mem­ § 1072(b)(l), Jan. 28, 2008, 122 Stat. 329) bers and their dependents annual percentage Section, added Pub. L. 106-398, § 1 [[div. A], title X, rates of interest for any consumer credit or § 1071(a)J, Oct. 30, 2000, 114 Stat. 1654, 1654A-275; amended loans higher than the legal limit for residents Pub. L. 107-107, div. A, title X, § 1048(c)(3), Dec. 28, 2001, 

115 Stat. 1226; Pub. L. 108-375, div. A, title X, § 1062, Oct. of the State; or 

28, 2004, 118 Stat. 2056, prohibited the Department of De­ (B) permit violation or waiver of any State 

fense from granting or renewing security clearances for consumer lending protections covering consum~ certain persons. er credit for the benefit of residents of the 

EFFECTIVE DATE OF REPEAL State on the basis of nonresident or military 

status of a covered member or dependent of 

Pub. L. 110--181, div. A, title X, § 1072(b)(3), Jan. 28, 2008, such a member, regardless of the member's or 122 Stat. 330, provided that: "The amendments made by 

this subsection [repealing this section] shall take effect dependent's domicile or permanent home of 

on January 1, 2008." record. 

(e) LIMITATIONS.-It shall be unlawful for any § 987. Terms of consumer credit extended to creditor to extend consumer credit to a covered members and dependents: limitations member or a dependent of such a member with re­ (a) INTEREST.-A creditor who extends consum­ spect to which- er credit to a covered member of the armed forces (1) the creditor rolls over, renews, repays, re­ or a dependent of such a member shall not require finances, or consolidates any consumer credit 

the member or dependent to pay interest with re­ extended to the borrower by the same creditor 

spect to the extension of such credit, except as----- with the proceeds of other credit extended to (1) agreed to under the terms of the credit the same covered member or a dependent; agreement or promissory note; (2) the borrower is required to waive the bor­ (2) authorized by applicable State or Federal rower's right to legal recourse under any other­ law; and wise applicable provision of State or Federal (3) not specifically prohibited by this section. law, including any provision of the Servicemem­

(b) ANNUAL PERCENTAGE RATE.-A creditor de­ bers Civil Relief Act (50 U.S.C. 3901 et seq.); scribed in subsection (a) may not impose an an­ (3) the creditor requires the borrower to sub­ nual percentage rate of interest greater than 36 mit to arbitration or imposes onerous legal no­ percent with respect to the consumer credit ex­ tice provisions in the case of a dispute; tended to a covered member or a dependent of a (4) the creditor demands unreasonable notice covered member. from the borrower as a condition for legal ac­ (c) MANDATORY LOAN DISCLOSURES.- tion; (!) INFORMATION REQUIRED.-With respect to (5) the creditor uses a check or other method 

any extension of consumer credit (including any of access to a deposit, savings, or other finan­ consumer credit originated or extended through cial account maintained by the borrower, or the the internet) to a covered member or a depend­ title of a vehicle as security for the obligation; ent of a covered member, a creditor shall pro­ (6) the creditor requires as a condition for the vide to the member or dependent the following extension of credit that the borrower establish information orally and in writing before the is­ an allotment to repay an obligation; or suance of the credit: (7) the borrower is prohibited from prepaying (A) A statement of the annual percentage, the loan or is charged a penalty or fee for pre­ rate of interest applicable to the extension of paying all or part of the loan. credit. 

(B) Any disclosures required under the Truth (f) PENALTIES AND REMEDIES.-

in Lending Act (15 U.S.C. 1601 et seq.). (!) MISDEMEANOR.-A creditor who knowingly 

(C) A clear description of the payment obli­ violates this section shall be fined as provided 

gations of the member or dependent, !!,S appli­ in title 18, or imprisoned for not more than one 

cable. year, or both. 

(2) PRESERVATION OF OTHER REMEDIES.-The (2) TERMS.-Such disclosures shall be present­ remedies and rights provided under this section ed in accordance with terms prescribed by the are in addition to and do not preclude any rem­ regulations issued by the Board of Governors of edy otherwise available under law to the person the Federal Reserve System to implement the claiming relief under this section; including any Truth in Lending Act (15 U.S.C. 1601 et seq.). award for consequential and punitive damages. 

(d) PREEMPTION.- (3) CONTRACT V0ID.-Any credit agreement, 

(!) INCONSISTENT LAWS.-Except as provided promissory note, or other contract proh!-bited 

in subsection (f)(2), this section preempts any under this section is void from the inception of 

State or Federal law, rule, or regulation, includ- such contract. 

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Page 439 TITLE 10--ARMED FORCES § 987 

(4) ARBITRATION.-Notwithstandin·g section 2 (g) SERVICEMEMBERS CIVIL RELIEF ACT PROof title 9, or any other Federal or State law, TECTIONS UNAFFECTED.-Nothing in this section 

rule, or regulation, no agreement to arbitrate may be construed to limit or otherwise affect the 

any dispute involving the extension of consum­ applicability of section 207 of the Servicememer credit shall be enforceable against any cov­ bers Civil Relief Act (50 U.S.C. 3937). 

ered member or dependent of such a member, or (h) REGULATIONS.-(1) The Secretary of Defense 

any person who was a covered member or de­ shall prescribe regulations to carry out this secpendent of that member when the agreement tion. 

was made. (2) Such regulations shall establish the follow­

(5) CIVIL LIABILITY.- ing: 

(A) IN GEN.ERAL.-A person who violates this. (A) Disclosures required of any creditor that 

section with respect to any person is civilly extends consumer credit to a covered member 

liable to such person for- or dependent of such a member. 

(i) any actual damage sustained as a re­ (B) The method for calculating the applicable 

sult, but not less than $500 for each viola­ annual percentage rate of interest on such oblition; gations, in accordance with the limit established 

(ii) appropriate punitive damages; under this section. 

(iii) appropriate equitable or declaratory (C) A maximum allowable amount of all fees, 

and the types of fees, associated with any such relief; and 

extension of credit, to be expressed and dis­ (iv) any other relief provided by law. closed to the borrower as a total amount and as (B) COSTS OF THE ACTION.-In any success­ a percentage of the principal amount of the obful action to enforce the civil liability described ligation, at the time at which the transaction 

in subparagraph (A), the person who violated is entered into. 

this section is also liable for the costs of the (D) Definitions of "creditor" under paragraph 

action, together with reasonable attorney fees (5) and "consumer credit" under paragraph (6) 

as determined by the court. of subsection (i), consistent with the provisions 

(C) EFFECT OF FINDING OF BAD FAITH AND of this section. 

HARASSMENT.-In (E) Such other criteria or limitations as the any successful action by a Secretary of Defense determines appropriate, con­ defendant under this section, if the court finds 

sistent with the provisions of this section. the action was brought in bad faith and for 

the purpose of harassment, the plaintiff is (3) In prescribing regulations under this subsecliable for the attorney fees of the defendant as tion, and not less often than once every two years 

determined by the court to be reasonable in thereafter, the Secretary of Defense shall consult 

relation to the work expended and costs in­ with the following: 

curred. (A) The Federal Trade Commission. 

(D) DEFENSES.-A person may not be held (B) The Board of Governors of the Federal 

Reserve System. liable for civil liability under this paragraph (C) The Office of the Comptroller of the Cur­ if the person shows by a preponderance of evirency. dence that the violation was not intentional (D) The Federal Deposit Insurance Corpora­ and resulted from a bona fide error notwith­ tion. standing the maintenance of procedures rea­ (E) The Bureau of Consumer Financial Pro­ sonably adapted to avoid any such error. Ex­ tection. amples of a bona fide error include clerical, (F) The National Credit Union Administration. calculation, computer malfunction and program­ (G) The Treasury Department. ming, and printing errors, except that an error of legal judgment with respect to a per­ (i) DEFINITIONS.-In this section: 

son's obligations under this section is not a (1) COVERED MEMBER.-The term "covered membona fide error. ber" means a member of the armed forces who 

(E) JURISDICTION, VENUE, AND STATUTE OF isLIMITATIONS.-An action for civil liability un­ (A) on active duty under a call or order that 

der this paragraph may be brought in any ap­ does not specify a period of 30 days or less; or 

propriate United States district court, with­ (B) on active Guard and Reserve Duty. 

out regard to the amount in controversy, or (2) DEPENDENT.-The term "dependent", with in any other court of competent jurisdiction, respect to a covered member, means a person not later than the earlier of- . described in subparagraph (A), (D), (E), or (I) of (i) two years after the date of discovery section 1072(2) of this title. by the plaintiff of the violation that is the (3) INTEREST.-The term "interest" includes basis for such liability; or all cost elements associated with the extension (ii) five years after the date on which the of credit, including fees, service charges, renew­ violation that is the basis for such liability al charges, credit insurance premiums, any an­ occurs. cillary product sold with any extension of cred­

(6) ADMINISTRATIVE ENFORCEMENT.-The pro­ it to a servicemember or the servicemember's 

visions of this section (other than paragraph (1) dependent, as applicable, and any other charge 

of this subsection) shall be enforced by the agen­ or premium with respect to the extension of 

cies specified in section 108 of the Truth in Lend­ consumer credit. 

ing Act (15 U.S.C. 1607) in the manner set forth (4) ANNUAL PERCENTAGE RATE.-The term "anin that section or under any other applicable nual percentage rate" has the same meaning as 

authorities available to such agencies by law. in section 107 of the Truth and Lending Act (15 

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§987 TITLE 10-ARMED FORCES Page 440 

U.S.C. · 1606), as implemented by regulations of EFFECTIVE DATE OF 2013 AMENDMENT 

the Board of Governors of the Federal Reserve Pub. L. 112--239, div. A, title VI, § 661(c), Jan. 2, 2013, 126 

System. For purposes of this section, such term Stat. 1785, provided that: 

includes all fees and charges, including charges "(1) MODIFICATION OF REGULATIONS.-The Secretary of 

and fees for single premium credit insurance Defense shall modify the regulations prescribed under 

and other ancillary products sold in connection subsection (h) of section 987 of title 10, United States 

with the credit transaction, and such fees and Code, to take into account the amendments made,by 

subsection (a) [amending this section]. charges shall be included in the calculation of "(2) EFFECTIVE DATE.-The amendments made by sub­ the annual percentage rate. section (a) shall take effect on- (5) CREDITOR.-The term "creditor" means a "(A) the date that is one year after the date of the 

person- enactment of this Act [Jan. 2, 2013]; or (A) who- "(B) such earlier date as the Secretary shall specify 

(i) is engaged in the business of extending in the modification of regulations required by para,. 

consumer credit; and graph (1). 

(ii) meets such additional criteria as are "(3) PuBLICATION OF EARLIER DATE.-If the Secretary 

specified for such purpose in regulations pre­ specifies an earlier effective date for the amendments 

made by subsection (a) pursuant to paragraph (2){B), the scribed under this section; or Secretary shall publish notice of such earlier effective 

(B) who is an assignee of a person described date in the Federal Register not later than 90 days bein subparagraph (A) with respect to any con- fore such earlier effective date." 

Pub. L. 112--239, div. A, title VI, § 662{c), Jan. 2, 2013, 126 sumer credit extended. · Stat. 1786, provided that: "The amendment made by sub­

(6) CONSUMER CREDIT.-The term "consumer section (a) [amending this section] shall apply with recredit" has the meaning provided for such term spect to consumer credit.extended on or after the date of 

in regulations prescribed under this section, ex­ the enactment of this Act [Jan. 2, 2013]." 

cept that such term does not include (A) a resi­ EFFECTIVE DATE 

dential mortgage, or (B) a loan procured in the Pub. L. 109-364, div. A, title VI, §670(c), Oct. 17, 2006, course of purchasing a car or other personal 120 Stat. 2269, provided that: 

property, when that loan is offered for the ex­ "(1) IN GENERAL.-Except as provided in paragraph (2), 

press purpose of financing the purchase and is section 987 of title 10, United States Code, as added by 

secured by the car or personal property pro­ subsection (a), shall take effect on October 1, 2007, or on 

cured. such earlier date as may be prescribed by the Secretary 

of Defense; and shall apply with respect to extensions of 

(Added Pub. L. 109-364, div. A, title ·vI, § 670(a), consumer credit on or after such effective date. 

Oct. 17, 2006, 120 Stat. 2266; amended Pub. L. 112--239, "(2) AUTHORITY TO PRESCRIBE REGULATIONS.-Subsecdiv. A, title VI, §§661(a), (b), 662(a), (b), 663, Jan. 2, tion (h) of such section shall take effect on the date of 

2013, 126 Stat. 1785, 1786; Pub. L. 114-328, div. A, the enactment of this Act [Oct. 17, 2006]. 

title X, § 1081(b)(2)(A), Dec. 23, 2016, 130 Stat. 2418.) "(3) PuBLICATION OF EARLIER EFFECTIVE DATE.-If the 

Secretary of Defense prescribes an effective date for secREFERENCES IN TEXT tion 987 of title 10, United States Code, as added by subsection (a), earlier than October 1, 2007, the Secretary The Truth in Lending Act, referred to in subsec. (c)(l)(B), shall publish that date in the Federal Register. Such (2), is title I of Pub. L. 90-321, May 29, 1968, 82 Stat. 146, publication shall be made not less than 90 days before as amended, which is classified generally to subchapter I that earlier effective date." 

(§ 1601 et seq.) of chapter 41 of Title 15, Commerce and 

Trade. For complete classification of this Act to the Code, MEETINGS WITH PRIVATE SECTOR USERS OF SYSTEMS 

see Short Title note set out under section 1601 of Title 15 Pub. L. 114-92, div. A, title V, §594(b)(3), Nov. 25, 2015, and Tables. 129 Stat. 834, provided that: "The Director of the Defense The Servicemembers Civil Relief Act, referred to in Manpower Data Center shall meet regularly with private subsec. (e)(2), is act Oct. 17, 1940, ch. 888, 54 Stat. 1178, sector users of Defense Manpower Data Center systems which is classified generally to chapter 50 (§ 3901 et seq.) used to identify covered borrowers and covered policy­ of Title 50, War and National Defense. For complete clas­ holders under military consumer protection laws to learn sification of this Act to the Code, see section 3901 of about issues facing such users and to develop ways of ad­ Title 50 and Tables. dressing such issues. The first meeting pursuant to this 

requirement shall take place with [within] three months AMENDMENTS after the date of the enactment of this Act [Nov. 25, 2015]." 

2016-Subsec. (e)(2). Pub. L. 114-328, § 108l(b)(2)(A)(i), INTERIM REGULATIONS inserted "(50 U.S.C. 3901 et seq.)" before semicolon at 

end. Pub. L. 109--364, div. A, title VI, §670(d), Oct. 17, 2006, 

Subsec. (g). Pub. L. 114-328, § 108l(b)(2)(A)(ii), substi­ 120 Stat. 2269, provided that: "The Secretary of Defense 

tuted "(50 U.S.C. 3937)" for "(50 U.S.C. App. 527)". may prescribe interim regulations as necessary to carry 

2013-Subsec. (d)(2)(A). Pub. L. 112--239, § 66l(a)(l), in­ out such section [this section]. For the purpose of preserted "any consumer credit or" before "loans". scribing such interim regulations, the Secretary is exSubsec. (d)(2)(B). Pub. L. 112--239, §661(a)(2), inserted cepted from compliance with the notice-and-comment re­

"covering consumer credit" after "State consumer lend­ quirements of section 553 of title 5, United States Code. 

ing protections". All interim rules prescribed under the authority of this 

Subsec. (f)(5), (6). Pub. L. 112--239, §662(a), (b), added subsection that are not earlier superseded by final rules 

pars. (5) and (6). shall expire no later than 270 days after the effective 

Subsec. (h)(3). Pub. L. 112--239, §661(b)(l), inserted "and date of section 987 of title 10, United States Code [see 

not less often than once every two years thereafter," af­ Effective Date note above], as added by this section." 

ter "under this subsection," in introductory provisions. 

Subsec. (h)(3)(E). Pub. L. 112--239, § 661(b)(2), added sub­ CHAPTER 50-MISCELLANEOUS COMMAND 

par. (E) and struck out former subpar. (E) which read a.s RESPONSIBILITIES 

follows: "The Office of Thrift Supervision." Sec. Subsec. (i)(2). Pub. L. 112--239, § 663, amended par. (2) 991. Management of deployments of members and 

generally. Prior to amendment, par. (2) defined the term measurement and data collection of unit op­ "dependent". erating and personnel tempo. 

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