Military Lending Act 2023 | MLA Benefits Explained

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The Military Lending Act protects active duty military servicemembers and their spouses from certain lending practices.

Also known as the MLA, this law provides many benefits for active duty troops and their spouses including annual fee waivers on the best military credit cards from American Express and Chase.

What is the Military Lending Act?

The Military Lending Act was enacted in 2006 and is implemented by the Department of Defense. It protects active duty servicemembers, their spouses, and their dependents from certain lending practices, such as charging more than 36% annual interest on loans.

These individuals are identified as “covered borrowers” of the MLA. National Guard and Reservists called to active duty orders of 30 days or more are also eligible for MLA benefits.

For covered transactions, such as consumer credit like payday loans and credit cards, the total annualized rate charged to a covered borrower may not exceed 36 percent. This is calculated as the Military Annual Percentage Rate or MAPR.

The practical implications of the MLA is that American Express, Chase, Citi, and U.S. Bank do not charge covered borrowers annual fees.

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The annual fee waiver interpretation of the MLA opens up a world of travel hacking opportunities for military servicemembers and their spouses. You can open premium travel rewards cards, earning the welcome bonuses, reaping the annual benefits, and paying no annual fees.

Credit card companies were given until October 2017 to comply with the MLA rules. That is when Chase credit cards began waiving annual fees on their personal credit cards, including the Chase Sapphire Reserve® card.

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What is Military Annual Percentage Rate MAPR?

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Military Annual Percentage Rate or MAPR must be calculated on any covered credit product offered to a covered borrower. Any credit insurance premium or fee must be added to the MAPR.

The MAPR must not exceed 36 percent if offered to a covered borrower as determined by the credit issuer checking the MLA database.

If you are offered a loan or take out a loan that exceeds the 36 percent interest rate cap, talk to your Judge Advocate General's (JAG) or legal office on your base for help.

What types of loans are covered under MLA?

In general, any consumer credit product offered to covered borrowers including:

  • Payday loans, deposit advance products, tax refund anticipation loans, vehicle title loans
  • Overdraft lines of credit
  • Installment loans (except vehicle or personal property loans where the vehicle or personal property secures the loan)
  • Certain student loans
  • Credit card accounts opened after October 3, 2017

Does MLA Apply to Mortgages and Vehicles?

The Military Lending Act does not apply to residential mortgage transactions, regardless of whether the covered borrower lives in the home.

The MLA also does not apply to the financing of vehicles purchases if the loan is secured by the vehicle.

MLA does not apply to credit that is used primarily for business, commercial, or agricultural purposes. That is why no credit card company waives annual fees for their business credit cards.

Credit products that are subject to MLA protections include:

  • Credit cards;
  • Deposit advance products;
  • Overdraft lines of credit (but not traditional overdraft services); [7] 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).

What Agencies Enforce MLA?

The Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency, and the Federal Trade Commission (FTC) are all jointly responsible for enforcing the Military Lending Act.

A creditor cannot require that you submit to mandatory arbitration or give up rights under the Servicemembers Civil Relief Act or Military Lending Act.

What Does MLA Stand For?

In the context of the military, MLA stands for “Military Lending Act”

Check the Military Lending Act Database

The MLA database is how banks, credit unions, credit card companies, and lenders verify that you are a covered borrower and therefore eligible for MLA benefits. The MLA database is maintained by the Defense Manpower Data Center or DMDC.

You can access the Military Lending Act website at to verify that you are a covered borrower. If you are a covered borrower, then you can take my 100% free course The Ultimate Military Credit Cards Course.

I have taught 10,000 graduates since 2018 how to maximize their military credit card benefits. You can also check out the optimal order in which to open credit cards in my best credit cards for military article.

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Military Lending Act FAQ

How do banks identify MLA covered borrowers?

Banks, credit card companies, and other lenders use the MLA database to identify if you are a covered borrower of the Military Lending Act. They will need your last name, Social Security Number, and date of birth to check the MLA database.

Which agency is responsible for implementing the Military Lending Act?

The Department of Defense is responsible for implementing the Military Lending Act but several other agencies are responsible for enforcement of the MLA. These agencies include CFPB, FDIC, NCUA, and FTC.

What does MLA stand for?

MLA stands for “Military Lending Act” The MLA is a 2006 law that protects active duty servicemembers, their spouses, and their dependents from certain lending practices.

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