Kilmartin wants new MLA protections

PROVIDENCE – Attorney General Peter F. Kilmartin is calling for stricter regulations to protect service members from predatory lending.
In a letter, Kilmartin and 21 other attorneys general urged the U.S. Department of Defense to strengthen proposed revisions to regulations implementing the federal Military Lending Act. The letter praised the department for closing some loopholes in the current rules, while highlighting weaknesses in the revised regulations that could leave service members exposed to common abusive lending practices.
The act was intended to shield service members from predatory-lending practices by capping interest rates and fees on loans to service members, and providing other important protections. However, since rules were adopted in 2007, some lenders have changed tactics to avoid complying with the law.
In response, the department this year published new proposed regulations aimed at providing more comprehensive protections for service members. The attorneys general cite two weaknesses in the proposed MLA regulations:
• An overly broad exemption for fees that may be charged in excess of the MLA’s 36 percent interest rate cap.
• A failure to regulate sham secured loans that are structured to evade MLA protections. •