Title: Military Lending Improvement Act of 
Policy area: Armed Forces and National Security

Summary:
Military Lending Improvement Act of 2018
This bill revises consumer credit protections for active members of the U.S. Armed Forces and their dependents, including by (1) expanding such protections to cover individuals who have been separated from the Armed Forces for up to one year, (2) expanding the protections to cover loans for purchasing personal property secured by such personal property, (3) reducing the maximum allowable annual interest rate of covered loans, (4) prohibiting creditors from installing a device on a borrower's car that can affect the car's operation or report its location, and (5) imposing certain limitations on debt collection practices.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3334 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3334

  To amend section 987 of title 10, United States Code, to expand and 
improve consumer credit protections for members of the Armed Forces and 
               their dependents, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2018

  Mr. Nelson introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To amend section 987 of title 10, United States Code, to expand and 
improve consumer credit protections for members of the Armed Forces and 
               their dependents, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Lending Improvement Act of 
2018''.

SEC. 2. EXPANSION AND IMPROVEMENT OF CONSUMER CREDIT PROTECTIONS FOR 
              MEMBERS OF THE ARMED FORCES.

    (a) Extension of Applicability to Individuals Recently Discharged 
or Released From the Armed Forces.--Paragraph (1) of subsection (i) of 
section 987 of title 10, United States Code, is amended to read as 
follows:
            ``(1) Covered member.--The term `covered member' means the 
        following:
                    ``(A) A member of the armed forces who is--
                            ``(i) on active duty under a call or order 
                        that does not specify a period of 30 days or 
                        less; or
                            ``(ii) on active Guard and Reserve duty.
                    ``(B) An individual who was separated, discharged, 
                or released from duty described in subparagraph (A), 
                but only during the 365-day period beginning on the 
                date of separation, discharge, or release.''.
    (b) Decrease in Maximum Authorized Annual Percentage Rate on 
Credit.--
            (1) Decrease in rate.--Subsection (b) of such section is 
        amended by striking ``36 percent'' and inserting ``24 
        percent''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date that is 180 days after the date 
        of the enactment of this Act, and shall apply with respect to 
        consumer credit extended on or after such effective date.
    (c) Prohibition on Creditor Use of Auto Tracking or Kill 
Switches.--Subsection (e) of such section is amended--
            (1) in paragraph (6), by striking ``or'' at the end;
            (2) in paragraph (7), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following new paragraph:
            ``(8) the creditor demands, as a condition for the credit, 
        the application of--
                    ``(A) a device that can locate or adjust the 
                operations of the borrower's motor vehicle by a third 
                party; or
                    ``(B) any other device or instrument that may pose 
                a safety hazard or compromise the borrower's privacy, 
                as determined by the Secretary of Defense, in 
                consultation with the Federal Trade Commission.''.
    (d) Extension of Coverage to Credit for Cars and Other Personal 
Property.--
            (1) Coverage.--Subsection (i)(6) of such section is amended 
        by striking ``(A) a residential mortgage'' and all that follows 
        and inserting ``a residential mortgage.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date that is 180 days after the date 
        of the enactment of this Act, and shall apply with respect to 
        consumer credit extended on or after such effective date.
    (e) Regulations.--The Secretary of Defense shall modify the 
regulations prescribed to carry out section 987 of title 10, United 
States Code, to take into account the amendments made by subsections 
(a) through (d) by not later than 180 days after the date of the 
enactment of this Act.

SEC. 3. ENHANCED PROTECTION AGAINST DEBT COLLECTOR HARASSMENT OF 
              MEMBERS OF THE ARMED FORCES.

    (a) Communication in Connection With Debt Collection.--Section 805 
of the Fair Debt Collection Practices Act (15 U.S.C. 1692c) is amended 
by adding at the end the following:
    ``(e) Communications Concerning Servicemember Debts.--
            ``(1) Definition.--In this subsection, the term `covered 
        member' has the meaning given the term in section 987(i) of 
        title 10, United States Code.
            ``(2) Prohibition.--A debt collector may not communicate, 
        in connection with the collection of any debt, with the 
        commanding officer or officer in charge of any covered member, 
        including for the purpose of acquiring location information 
        about the covered member.''.
    (b) False or Misleading Representations.--Section 807 of the Fair 
Debt Collection Practices Act (15 U.S.C. 1692e) is amended by adding at 
the end the following:
            ``(17) The false representation to any covered member, as 
        defined in section 987(i) of title 10, United States Code, that 
        failure to cooperate with a debt collection will result in 
        prosecution under chapter 47 of title 10, United States Code 
        (the Uniform Code of Military Justice).''.

SEC. 4. DATA PROTECTION STANDARDS FOR CREDIT REPORTING AGENCIES THAT 
              USE DEPARTMENT OF DEFENSE PERSONNEL DATA.

    (a) Determination on Adequacy of Data Protection Standards.--Not 
later than one year after the date of the enactment of this Act, the 
Secretary of Defense shall, in consultation with the Federal Trade 
Commission, determine whether or not each entity that downloads 
Military Lender Act bulk data from the Defense Manpower Data Center 
uses adequate safeguards to protect the downloaded data against breach 
or other potential misuse. The Secretary shall make the determination 
using a study of the practices of such entities conducted by the 
Secretary for purposes of this subsection.
    (b) Termination of Access to Bulk Data.--If pursuant to subsection 
(a), the Secretary determines that the safeguards of an entity 
described in that subsection are not adequate as described in that 
subsection, the Secretary shall terminate the access of the entity to 
bulk data described in that subsection by not later than 30 days after 
the date of the determination.
    (c) Restoration of Access to Bulk Data.--If access of an entity to 
bulk data is terminated pursuant to subsection (b), the Secretary may 
subsequently restore access of the entity to bulk data if the Secretary 
determines that the entity has taken remedial measures to ensure that 
any data downloaded from such bulk data is adequately protected against 
breach or other potential misuse.
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