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CFPB issues another MLA consent order On December 30, 2021 the Consumer Financial Protection Bureau (CFPB) issued a consent order with Omni Financial (Omni) for violations of the Military Lending Act (MLA) and the Electronic Funds Transfer Act. This is the second such action in recent weeks, as we blogged about here, which is in line with the bureau’s statement that it is investigating other MLA violations. Under the MLA, someone is a covered borrower if they are an active member of the military, or a dependent of such person, at the time of becoming obligated on most consumer loans. There are exceptions for some products, such as motor vehicle purchase loans and residential loans. When a loan within the scope of the MLA is made to a covered borrower, there are, among other things, disclosure requirements, a 36% Military Annual Percentage Rate (MAPR) cap on the loan and specific contractual limitations such as: ....
On December 30, 2020, the CFPB announced a consent order with Omni Financial of Nevada, Inc. based on alleged violations of the Military Lending Act (MLA) and Electronic Funds Transfer Act (EFTA). This is the second consent order announced as part of a sweep of investigations for potential MLA violations. According to the CFPB, Omni as an installment lender making tens of thousands of loans annually, generally in smaller amounts, ranging from $500 to $10,000. Over 90% of Omni’s loans are extended to servicemembers or their dependents who are protected by the MLA. Less than 10% of Omni’s loans are extended to borrowers who are not protected by the MLA, such as civilians and military retirees. ....
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