Today, the Department of Defense released proposed rules to further protect service members and their families from predatory lending practices. If fully implemented, these rules will strengthen protections under the Military Lending Act and close loopholes unscrupulous lenders use to target military families with unconscionable high-cost loans.

In response, Center for Responsible Lending president Mike Calhoun issued the following statement:

The Department of Defense is taking effective action to protect service members and their families from abusive lending practices. No more loopholes. No more evasions. The proposed rules will end the debt trap.

The Military Lending Act was intended to stop payday, car-title, and other high-cost lenders from peddling predatory loans to our men and women in uniform. Today's proposed rules are clear and comprehensive and will protect against debt traps that undermine the financial security of service members and their families.

The department's earlier regulations addressed the abuses they found at the time for short-term, small dollar loans. The lenders found loopholes and managed to escape accountability by offering loans with terms that were a day longer or a dollar more than loans covered by the rules. And the bad actors continued to charge triple digit interest rates.

These practices are wrong. They exploit men and women who put their lives on the line to protect our country. Their actions provide ample justification for the department's proposed changes, and they warrant the continued attention of regulators and policymakers.

The proposed rules released today provide welcome relief for struggling military families.

The bipartisan Military Lending Act was passed by the House and Senate and signed into law by President George W. Bush as a part of the 2007 National Defense Authorization Act. The law limited loans to 36 percent military APR – an all-inclusive annual percentage rate that factors in the cost of interest, fees and other add-on products like credit insurance. In its original regulations enforcing the law, the Department of Defense applied this interest rate limit to a specific set of loans they determined to be unfair and abusive. Over the years, as lenders found ways to circumvent the definitions, it became clear that a more comprehensive approach is needed.

To discuss Mike Calhoun's comments or request an interview with a CRL spokesperson on how the Department of Defense's new MLA regulations will protect service members, please contact Catherine An at or 202-349-1878.

For more information, contact Catherine An at 202-349-1878 or