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©2016 Experian Information Solutions, Inc. All rights reserved. Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
Inside the Beltway:Must-Know Details About the Military Lending Act
There is no dial-in number for this webinar. Please access audio via your computer speakers.
2©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
WELCOME &INTRODUCTIONS[ ]
3©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Military Protections Extended
The CFPB strongly supports the Department’s efforts to strengthen consumer protections for our nation’s military families”...”As one of the agencies responsible for enforcing the Military Lending Act, we stand ready to stop illegal lending to military families.
“”— Richard Cordray, CFPB
4©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Military Lending Act: At a Glance
The MLA provides service members and their dependents with specific protections for their “consumer credit” transactions.
— Military Lending Act of 2006 (MLA)
— Military Lending Act Final Rule in July, 2015
5©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Speakers: Introducing…
Tom SikoraExecutive DirectorJPMorgan Chase
Keoki HuffmanDirector of ProductManagement-ConsumerExperian
Bill ButlerProduct DirectorExperian
Klaudette ChristensenVice President of Product Management Experian
6©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
INSIDERPERSPECTIVE[ ]
7©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Military Lending Act
Military Lending Act of 2006 (MLA)
Protects military families from predatory lending Caps annual interest rates for consumer credit to 36% Requires written and oral disclosure of interest rates and payment obligations before a loan is issued Focus on payday lending, car title loans, and refund anticipation loans
8©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Military Lending Act: Final Rule - 2015
MLA Final Rule – 2015New MLA rule effective Oct. 1, 2015. Compliance required by Oct. 3, 2016.
Extends MLA protections, including a 36% Military Annual Percentage Rate (MAPR) cap, toa wider range of credit products
Modifies the MAPR to include fees for credit-related ancillary products sold in connectionwith the credit transaction, finance charges, and certain application and participation fees.
Provides a Safe Harbor for creditors ascertaining whether a consumer is covered bythe final rule's protections
Modifies the existing prohibition on rolling over, renewing or refinancing consumer credit Subjects creditors to civil liability and administrative enforcement for MLA violations
9©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Servicemembers Civil Relief Act
Servicemembers Civil Relief Act (SCRA)
Provides a range of protections in civil matters for servicemembers to allow them to devote their attention to the defense needs of the nation and relieve stress on the family members of those deployed
Provisions in the SCRA may postpone or suspend certain obligations, such as outstanding credit card debt, mortgage payments, pending trials, taxes, and terminations of leases for certain servicemembers
Extends protection to the consumer while they are on active duty service andthereafter for a period of time
10©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
MLA & SCRA: Differences You Need to Know
MLA SCRA
Who Active military members and their dependents Active military members and their dependents (indirectly)
When Applies at point of origination(compliance leverages MLA database)
Applies to existing debt (compliance leverages SCRA database)
What
• Payday loans• Vehicle title loans• Refund anticipation loans• Deposit advance loans• Installment loans• Unsecured open-end lines of credit• Credit cards (10/3/17)
• Outstanding credit card debt• Mortgage payments• Pending trials• Terminations of lease• Collection activity
How The MLA limits interest rates and fees to 36% MAPR (Military Annual Percentage Rate).
The SCRA caps interest rate charges, including late fees and other transaction fees, at 6%.
11©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Key Regulation Impacts From the “Hill”
Expanded definitionof covered loans
Safe Harbor through:
• Department of Defense Database
• Nationwide ConsumerReporting Agency
Experian worked with the Financial Services Roundtable, Department of Defense and other industry leaders to arrive at the solution we offer you today.
MLA STANDARDSAFFECT:
Payday loans
Vehicle Title
Refund application, deposit advance and autoinstallment loans
Unsecured open-end linesof credit
Credit cards
FINANCIALPRODUCTS
CAPPED
Military AnnualPercentage Rate
All-inclusive rate, capturing fees, charges and the saleof credit-related products
MLA RULE INCLUDES:
No longer will banks require service members to:
• Submit to mandatory arbitration and legal requirements
• Waive the Servicemembers Civil Relief Act rights
• Provide a payroll allotment
• Allow continual refinance of apayday loan
• Provide a post-dated check
• Access a bank account or car title
Military Lending Act
36%
12©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
MLA: The Impact to Your Business
Oct. 3, 2016 Compliance Deadline
Penalties for non-compliance• Refund all fees and interests• Misdemeanor• Private lawsuits authorized• Reputational Risk
Oct. 3, 2017 Compliance Date for Credit Cards
Safe Harbor Recordkeeping
Products to be covered
System Integration • New Segment on credit report
13©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
INDUSTRYPERSPECTIVE[ ]
14©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Why MLA Matters to You
Regulatory Economic Customer Technology
Multiple regulators: CFPB, FCC, FTC
Consumer disputes are increasing by over 40% on average the last three years
New MLA rulings require compliance at origination for Safe Harbor
Increased legal and compliance fees
Potential class action litigation, settlements and lawsuits
Millions of dollars in fines and penalties for non-compliance
Digital customer needs Customer treatment
strategies are essential, especially for military personnel and their families
Customer treatment and retention
Single customer, multiple accounts
Seamless workflow process at origination
15©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Your Top MLA Questions Answered
How would you describe an ideal MLA process?
16©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Your Top MLA Questions Answered
Which products in your organization do you consider
covered by the MLA?
17©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Your Top MLA Questions Answered
What would you recommend an organization do around required
documentation, controls and data flow to partners?
18©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
MLA: Lender Best Practices & Key Challenges
Servicing Compliance
Develop internal procedures and train support staff Understand MAPR calculations
Build a process and plan to handle oral disclosures Manage DoD guidance
Establish processes to handle complaints/disputes and ways to obtain covered borrower status
Governance and tracking
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19©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
OUR NEXTSTEPS…[ ]
20©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
MLA Compliance & Safe Harbor for Lenders
To comply with MLA and be extended Safe Harbor, lenders need to identify who is an “MLA Covered Borrower”.
Experian offers lenders the indirect method of compliance
• Obtain information directly or indirectly from the Department of Defense’s DMDC database
• Identify who is an “MLA Covered Borrower” at point of originationHow?
• Compliance required by Oct. 3, 2016 (consumer credit)When?
21©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Experian’s Role
To determine whether a consumer is a covered borrower, a creditor may verify the status of a consumer by using a statement, code, or similar indicator describing that status, if any, contained in a consumer report obtained from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, or a reseller of such a consumer report…
“”— MLA §232.5(ii)
Credit Agency Role:• Department of Defense data connection• MLA covered borrower status segment, code, or indicator to describe the status
22©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Experian MLA Solutions
MLA Status viaCredit Report
Stand-Alone MLA Status
PrescreenSolution
ConsumerDisclosure
• Add-on data segment with MLA Covered Borrower Indicator status
• Leverage existing credit report segment (lite coding solution)
• Solution accessible via default settings or MLA keyword
• Ability to deliver MLA Status outside of credit report
• Solution accessible via default settings orMLA keyword
• Request MLA status to be appended to a prescreen list
• MLA data CAN be usedfor suppression
• MLA data CANNOT be used in triggers nor as the sole selection criteria
• If consumers are MLA Covered Borrowers, the status will be on the consumer disclosure
• Full Dispute process being designed and implemented, awaiting further information from the Departmentof Defense
Additional Experian solutions coming soon.
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23©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
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Credit Report MLA Indicator
BB&T 7-12 $17,000-O PAID CURR ACCT 1199117 BB I/L 3 1 10-28-12 10-12 ( 3) BCC 890810651093557 OWENSBORO NATIONAL BAN 6-09 $20,000-O PAID 2170303 BB SEC UNK 1 4-01-11 4-11 ( 1) B 13167205657 BK OF AMER 2-77 $13,500-L $3,061-H OPEN CURR ACCT 3202754 BC CRC REV 1 1-21-16 $248 1-16 (48) CCCCCCCCCCCCC 402411800737 1-16 $10 CCCCCCCCCCCC SYNCB/LOWES 10-03 $7,500-L $2,259-H OPEN CURR ACCT 1607340 LZ CHG REV 1 1-01-16 $0 1-16 (65) 000CCCCCCCCC0 7982220180170348 9-15 0000000000-- --------------------------------- MESSAGES ----------------------------------- MLA COVERED BORROWER CONSUMER ASSISTANCE CONTACT: EXPERIAN 701 EXPERIAN PARKWAY, PO BOX 2002, ALLEN, TX 75013 888.397.3742 END -- EXPERIAN
BB&T 7-12 $17,000-O PAID CURR ACCT 1199117 BB I/L 3 1 10-28-12 10-12 ( 3) BCC 890810651093557 OWENSBORO NATIONAL BAN 6-09 $20,000-O PAID 2170303 BB SEC UNK 1 4-01-11 4-11 ( 1) B 13167205657 BK OF AMER 2-77 $13,500-L $3,061-H OPEN CURR ACCT 3202754 BC CRC REV 1 1-21-16 $248 1-16 (48) CCCCCCCCCCCCC 402411800737 1-16 $10 CCCCCCCCCCCC SYNCB/LOWES 10-03 $7,500-L $2,259-H OPEN CURR ACCT 1607340 LZ CHG REV 1 1-01-16 $0 1-16 (65) 000CCCCCCCCC0 7982220180170348 9-15 0000000000-- --------------------------------- MESSAGES ----------------------------------- MLA COVERED BORROWER CONSUMER ASSISTANCE CONTACT: EXPERIAN 701 EXPERIAN PARKWAY, PO BOX 2002, ALLEN, TX 75013 888.397.3742 END -- EXPERIAN
BB&T 7-12 $17,000-O PAID CURR ACCT 1199117 BB I/L 3 1 10-28-12 10-12 ( 3) BCC 890810651093557 OWENSBORO NATIONAL BAN 6-09 $20,000-O PAID 2170303 BB SEC UNK 1 4-01-11 4-11 ( 1) B 13167205657 BK OF AMER 2-77 $13,500-L $3,061-H OPEN CURR ACCT 3202754 BC CRC REV 1 1-21-16 $248 1-16 (48) CCCCCCCCCCCCC 402411800737 1-16 $10 CCCCCCCCCCCC SYNCB/LOWES 10-03 $7,500-L $2,259-H OPEN CURR ACCT 1607340 LZ CHG REV 1 1-01-16 $0 1-16 (65) 000CCCCCCCCC0 7982220180170348 9-15 0000000000-- --------------------------------- MESSAGES ----------------------------------- MLA COVERED BORROWER CONSUMER ASSISTANCE CONTACT: EXPERIAN 701 EXPERIAN PARKWAY, PO BOX 2002, ALLEN, TX 75013 888.397.3742 END -- EXPERIAN
BB&T 7-12 $17,000-O PAID CURR ACCT 1199117 BB I/L 3 1 10-28-12 10-12 ( 3) BCC 890810651093557 OWENSBORO NATIONAL BAN 6-09 $20,000-O PAID 2170303 BB SEC UNK 1 4-01-11 4-11 ( 1) B 13167205657 BK OF AMER 2-77 $13,500-L $3,061-H OPEN CURR ACCT 3202754 BC CRC REV 1 1-21-16 $248 1-16 (48) CCCCCCCCCCCCC 402411800737 1-16 $10 CCCCCCCCCCCC SYNCB/LOWES 10-03 $7,500-L $2,259-H OPEN CURR ACCT 1607340 LZ CHG REV 1 1-01-16 $0 1-16 (65) 000CCCCCCCCC0 7982220180170348 9-15 0000000000-- --------------------------------- MESSAGES ----------------------------------- MLA COVERED BORROWER CONSUMER ASSISTANCE CONTACT: EXPERIAN 701 EXPERIAN PARKWAY, PO BOX 2002, ALLEN, TX 75013 888.397.3742 END -- EXPERIAN
BB&T 7-12 $17,000-O PAID CURR ACCT 1199117 BB I/L 3 1 10-28-12 10-12 ( 3) BCC 890810651093557 OWENSBORO NATIONAL BAN 6-09 $20,000-O PAID 2170303 BB SEC UNK 1 4-01-11 4-11 ( 1) B 13167205657 BK OF AMER 2-77 $13,500-L $3,061-H OPEN CURR ACCT 3202754 BC CRC REV 1 1-21-16 $248 1-16 (48) CCCCCCCCCCCCC 402411800737 1-16 $10 CCCCCCCCCCCC SYNCB/LOWES 10-03 $7,500-L $2,259-H OPEN CURR ACCT 1607340 LZ CHG REV 1 1-01-16 $0 1-16 (65) 000CCCCCCCCC0 7982220180170348 9-15 0000000000-- --------------------------------- MESSAGES ----------------------------------- MLA COVERED BORROWER CONSUMER ASSISTANCE CONTACT: EXPERIAN 701 EXPERIAN PARKWAY, PO BOX 2002, ALLEN, TX 75013 888.397.3742 END -- EXPERIAN
BB&T 7-12 $17,000-O PAID CURR ACCT 1199117 BB I/L 3 1 10-28-12 10-12 ( 3) BCC 890810651093557 OWENSBORO NATIONAL BAN 6-09 $20,000-O PAID 2170303 BB SEC UNK 1 4-01-11 4-11 ( 1) B 13167205657 BK OF AMER 2-77 $13,500-L $3,061-H OPEN CURR ACCT 3202754 BC CRC REV 1 1-21-16 $248 1-16 (48) CCCCCCCCCCCCC 402411800737 1-16 $10 CCCCCCCCCCCC SYNCB/LOWES 10-03 $7,500-L $2,259-H OPEN CURR ACCT 1607340 LZ CHG REV 1 1-01-16 $0 1-16 (65) 000CCCCCCCCC0 7982220180170348 9-15 0000000000-- --------------------------------- MESSAGES ----------------------------------- MLA COVERED BORROWER CONSUMER ASSISTANCE CONTACT: EXPERIAN 701 EXPERIAN PARKWAY, PO BOX 2002, ALLEN, TX 75013 888.397.3742 END -- EXPERIAN
24©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Benefits on the Indirect Solution
Uninterrupted AccessWith access to the DMDC data, Experian does not have a file size limitation.
ConvenienceExperian offers a one-stop solution to offer our lenders the MLA indicator on the credit report at point of origination.
SpeedExperian does not require a 24 hour+ turnaround time for the search results.
Cost SavingsAutomated process reduces manual efforts and costs for our clients
25©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Experian MLA Solution Timelines: Key Dates
TODAY SEPTEMBER OCTOBER
Final Specifications published and available through
Account Executive
Testing environment available
Contracts available
Live Production Launch Financial Institution Compliance Commences
26©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Your Road to MLA Compliance: Next Steps
If you are an Experian Client If you are new to Experian
Contact your Experian account rep or Client Support at 800-831-5614 or email [email protected] Sign contract/addendum
Start testing
Become a member by calling 800-831-5614 or email [email protected]
Experian’s Customer Support Center is available Monday through Friday from 7am to 7pm Central time to answer questions about our products and services
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27©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
QUESTIONS?[ ]
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