If you took out a CashNetUSA loan while serving on active duty, your military status at the time the credit was opened may be important. The Military Lending Act, or MLA, gives covered servicemembers and certain dependents protections when they obtain covered consumer credit.
Those protections can affect the cost of the credit, required disclosures, arbitration provisions, and other loan terms.
That does not mean every CashNetUSA loan involving an active-duty servicemember violated the MLA. The specific loan, your military status when the credit was extended, the fees, the Military Annual Percentage Rate, or MAPR, and the contract terms can all matter.
Varnell & Warwick is here to help you navigate the legal intricacies if you ever find yourself having issues with a loan from CashNetUSA.
The MLA places limits on certain consumer credit extended to covered military borrowers.
One of its best-known protections is the cost limit: a creditor generally may not impose a Military Annual Percentage Rate greater than 36% on covered consumer credit.
The law and regulations also address other loan terms.
| Loan issue | Why it may matter |
| MAPR | Covered consumer credit is generally subject to a 36% MAPR limit. |
| Fees and charges | Certain charges may have to be included when MAPR is calculated. |
| Loan disclosures | Covered borrowers must receive specified MLA and payment information. |
| Arbitration | Creditors generally cannot require covered borrowers to submit disputes involving covered credit to mandatory arbitration. |
| Military allotments | A creditor generally cannot require a military allotment as a condition of receiving covered credit. |
| Early repayment | Covered borrowers cannot be charged a penalty simply for prepaying covered consumer credit. |
The regulation also requires certain disclosures before or when a covered borrower becomes obligated on the credit, including an MAPR statement, applicable Regulation Z disclosures, and a clear description of the payment obligation.
These rules are another reason to review the actual CashNetUSA agreement rather than focusing only on the advertised interest rate.
Q: Does the Military Lending Act apply to CashNetUSA loans?
A: It may apply to CashNetUSA consumer credit when the borrower was a covered service member or covered dependent at the relevant time and the particular credit falls within the MLA’s definition of covered consumer credit. Whether it applies to a specific loan depends on the facts.
Q: Can active-duty military members get CashNetUSA loans?
A: The MLA does not impose a blanket ban on lending money to active-duty service members. Instead, it places restrictions on the cost and terms of covered consumer credit.
Whether CashNetUSA will offer a particular product to an individual active-duty applicant is a separate question that can depend on the product, state, underwriting requirements, and applicable law. The CFPB notes that a lender may choose not to extend a loan when the lender’s product cannot comply with the MLA’s restrictions.
Q: What if my CashNetUSA APR was higher than 36%?
A: An APR above 36% does not automatically establish an MLA violation.
The relevant federal limit generally concerns MAPR. Because MAPR can include different fees and charges, the actual loan documents and cost calculation may need to be reviewed.
Q: What if I obtained the CashNetUSA loan before going on active duty?
A: A loan obtained before active-duty service can raise different legal issues.The MLA generally focuses on covered consumer credit extended while the borrower has covered military status. The Service Members Civil Relief Act, or SCRA, may instead be relevant to certain qualifying obligations incurred before active-duty service, including its separate interest-rate protections. The MLA and SCRA are different laws and should not be treated as interchangeable.
Q: Does an arbitration clause in my CashNetUSA agreement matter?
A: It can. The MLA regulations prohibit creditors from requiring covered borrowers to submit disputes involving covered consumer credit to mandatory arbitration. Whether a particular provision is relevant depends on the credit and the borrower’s covered status.
If you had a CashNetUSA loan while serving on active duty, you do not need to determine on your own whether the Military Lending Act applies.
The loan date, your military status, the type of CashNetUSA credit, your state, the APR and MAPR, fees, payment history, disclosures, automatic withdrawals, and contract terms may all be relevant. Contact Varnell & Warwick to discuss your situation and whether federal military lending protections may be relevant.
Call (352) 753-8600 or email case@vandwlaw.com to schedule a no-cost consultation with one of our attorneys. We handle nearly all of our cases on a contingency-fee basis, which generally means attorney fees are paid only if we win.
This article is for general informational purposes only and does not constitute legal advice. Whether the Military Lending Act, Service Members Civil Relief Act, or another law applies depends on the specific facts and circumstances of each situation. Reading this article does not create an attorney-client relationship with Varnell & Warwick.