Defense Department's New Rules for Consumer Loans to Service Members

The Department of Defense has finalized a regulation for consumer payday loans, vehicle title loans, and tax refund anticipation loans made to service members and their dependents. The regulation will affect all creditors (as defined in the regulation) who make these types of loans, including insured depository institutions like banks, savings and loan associations and credit unions.

While the scope of the regulation is narrow, and will likely affect traditional lenders from time to time, FIPCO is providing the following article to help users understand the new regulation. In addition, FIPCO has created two model forms to help creditors comply with certain aspects of the regulation. The forms are posted below. The regulation is effective October 1, 2007 .

Complete Form Instructions

WBA 141 - Covered Borrower Identification Statement

WBA 142 - Consumer Credit Disclosures Under the National Defense Authorization Act

The WBA 141 and WBA 142 are new forms being provided at no charge to customers and can be obtained by clicking the links above. The forms are "Model Forms" and can be printed, duplicated and/or used as needed.