Cancel Illegal Fees In Your CashNetUSA Military Spouse Loan

The MLA may apply to a CashNetUSA loan if the spouse who obtained the credit was a covered borrower at the relevant time and the transaction qualifies as covered consumer credit.

Under Department of Defense regulations, a covered borrower can include a dependent of a covered servicemember. The CFPB specifically identifies spouses of qualifying active-duty servicemembers among the people protected by the MLA.

That does not mean every CashNetUSA loan involving a military family is covered. The particular loan, military status, timing, and transaction terms still need to be considered.

The MLA also contains exceptions for certain types of credit, including residential mortgages and certain purchase-money loans secured by the vehicle or personal property being purchased.

Why Your Spouse’s Active-Duty Status at the Time of the Loan Matters

For MLA purposes, timing can be critical. The Department of Defense’s regulations generally define a covered borrower based on the consumer’s status when the consumer becomes obligated on the credit transaction or establishes the credit account. Covered members include servicemembers serving on qualifying active duty and Active Guard and Reserve duty.

For a military spouse who borrowed from CashNetUSA, a practical question is: Was your spouse serving in a qualifying military status when you obtained the CashNetUSA loan?

You may now be divorced, your spouse may be retired or separated, or the servicemember may have moved from active duty to the Guard or Reserve. Those current circumstances should not be used as a shortcut for deciding whether you were protected when the credit was originally extended.

Other CashNetUSA Loan Terms May Matter

The cost of the loan is not the only possible issue under the MLA.

Federal law and Department of Defense regulations also restrict certain terms in covered consumer credit. Depending on the transaction, relevant issues can include required arbitration, mandatory military allotments, prepayment penalties, refinancing or renewal provisions, and certain methods involving access to a borrower’s financial account.

These rules can be fact-specific. For example, federal regulations permit some electronic fund transfers in circumstances where other MLA requirements are satisfied. An automatic withdrawal therefore should not automatically be treated as proof that a loan violated the MLA.

What Records Should a Military Spouse Save?

If you had a CashNetUSA loan while your spouse was on active duty, useful records may include:

• your CashNetUSA loan agreement and disclosures;
• the date the loan or account was opened;
• documents showing APR, fees, and finance charges;
• payment history and bank statements;
• records of renewals, refinances, or additional borrowing;
• documents concerning automatic withdrawals;
• military orders or other records showing your spouse’s service status at the time; and
• records showing your marital status when the loan was obtained.

You do not need to calculate MAPR yourself before contacting an attorney. The goal is to preserve information that can help determine whether the loan and your military-family status warrant further review.

How Creditors Can Verify MLA Coverage

The MLA gives creditors options for checking whether a borrower has covered military status. A creditor may use the Department of Defense MLA database or qualifying information from a nationwide consumer reporting agency to obtain a regulatory safe harbor. The timing of that check matters because the rules generally tie the determination to when the transaction begins, the account is opened, or a qualifying firm offer is processed. 

For a military spouse, this makes the original loan date especially important. Records showing when CashNetUSA approved the credit may help an attorney compare the borrower’s status with the lender’s compliance obligations.. If the loan was from another payday lender, bring the lender information with you when discussing your situation.

What Can Happen if a Covered Loan Violates the MLA?

The Military Lending Act (MLA) and the Servicemembers Civil Relief Act (SCRA) both protect military bIf a covered CashNetUSA loan failed to comply with the MLA, the consequences may extend beyond recalculating interest or fees. Federal regulations state that a noncompliant credit agreement with a covered borrower can be void from the beginning. 

The MLA also provides potential civil remedies, including actual damages, a minimum recovery of $500 for each violation, appropriate punitive damages, equitable or declaratory relief, and reasonable attorney fees and costs in a successful action. Whether a remedy is available depends on the violation, applicable defenses, and filing deadlines. An attorney can review those issues alongside the loan documents and military-status evidence.

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