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Military Lending Act FAQs


Who is a "covered borrower" under the MLA?

For closed-end loans, like your PayCheck Direct® installment loan, you are a covered borrower if you are an active duty service member, their spouse, child, or other dependent at the time of purchase.


When is covered borrower status determined under the MLA?

For closed-end loans, like your PayCheck Direct® installment loan, whether you are a covered borrower is determined at the time you make a purchase.


Do I have to be a covered borrower to get MLA protection?

Yes. You must qualify as a covered borrower to get MLA account protection.


What protection does the MLA give me as a covered borrower?

If you are a covered borrower, your protection includes:
A 36% interest cap. Your total monthly interest cannot be more than the 36% Military Annual Percentage Rate (MAPR), which is calculated by including all of the following costs:
  • - interest
  • - fees
  • - credit service charges
  • - credit renewal charges
  • - credit insurance premiums
  • - other fees for credit-related products sold in connection with the loan

Please note: because there is no interest or other applicable costs or fees charged on your PayCheck Direct® loan, your annual percentage rate is 0 percent.

Written and oral disclosure. We must share the interest rates and other fees you owe, both orally and in writing, before your loan is issued.

No mandatory waivers of consumer protection laws. We cannot require you to waive any state or federal law that protects you from being sued while on active duty.

No mandatory arbitration. We cannot require you to arbitrate disputes about your loan.

No mandatory allotments. We cannot require you to make automatic paycheck allotments to repay your balance.

No prepayment penalty. We cannot charge a penalty if you pay your balance early.



When do the MLA protections become effective?

For closed-end loans, like your PayCheck Direct® installment loan, the MLA protections become effective on October 3, 2016.


How long do the MLA protections last?

The MLA protections remain in place as long as you continue to be a covered borrower.


Where can I find more information about the MLA?

To learn more about the MLA and how it may apply to your specific circumstances, you may contact your local Judge Advocate General's (JAG) office.