Stop High Rates On Your CashNetUSA Payday Loans Military Accounts

For MLA purposes, borrower status at the time credit is extended can be a central issue.

Department of Defense regulations define a covered borrower based on the consumer’s status when the consumer becomes obligated on a credit transaction or establishes an account for consumer credit. Covered members generally include servicemembers on qualifying active duty and members serving on Active Guard and Reserve duty.

That distinction matters for people who are no longer serving.

If you are now retired, separated, or otherwise out of the military, the fact that you no longer serve does not make your military status at the time you obtained the loan irrelevant. What happened when the credit was extended may still be important when reviewing the transaction.

At the same time, former active-duty status does not automatically mean that every later event involving an account remains covered by the MLA. The details of the particular credit arrangement and the borrower’s status can affect the analysis.

Does the Military Lending Act Cover Payday Loans?

Payday loans are generally among the types of consumer credit that may be covered by the Military Lending Act.

The Consumer Financial Protection Bureau identifies payday loans, deposit advances, many installment loans, overdraft lines of credit, and certain other credit products as generally falling within MLA coverage. Some types of credit are excluded, including certain mortgages and purchase-money loans secured by the vehicle or property being purchased.

The lender’s identity is only one part of the issue.

If your credit came from CashNetUSA, the specific CashNetUSA product and agreement matter. Not every CashNetUSA credit product should automatically be described as a payday loan.

If your loan came from another payday lender, that does not make the MLA question disappear. The lender, product, loan date, military status, fees, and agreement still may need to be reviewed.

The MLA Covers More Than the Cost of Credit

The MLA also addresses certain loan terms and creditor practices.

For covered consumer credit, federal law and Department of Defense regulations can restrict mandatory arbitration provisions, mandatory military allotments, prepayment penalties, and certain waivers of legal rights. Creditors also have specific disclosure obligations for covered borrowers.

That means a review of a military payday-loan issue should not focus only on the interest rate. The written agreement may matter just as much.

What about automatic bank withdrawals?

Automatic withdrawals deserve careful attention, but they do not automatically mean the MLA was violated.

The MLA regulations contain restrictions involving access to a covered borrower’s financial account, but they also expressly allow certain electronic fund transfers used to repay consumer credit when the transaction otherwise complies with the applicable MAPR requirement and other law.

If payments were automatically taken from your bank account, save the records. The dates, amounts, authorization language, and underlying loan terms may help explain how the account operated..

What If You Are Retired or Separated Now?

If you are no longer serving but obtained the loan while you were on active duty, do not assume your past military status no longer matters.

The MLA focuses heavily on covered-borrower status when credit is extended. That makes the date the loan or credit account was opened an important fact.

For example, someone who retired two years ago may still have questions about a loan obtained during qualifying active-duty service. Someone who joined the military only after taking out the loan may face a different legal analysis.

This is also where the Servicemembers Civil Relief Act, or SCRA, can raise different questions. The SCRA includes protections that may apply to certain obligations incurred before military service. The MLA generally addresses covered consumer credit extended to eligible military borrowers.

The two laws should not be treated as interchangeable.

Can Military Spouses and Dependents Be Protected?

Yes. Qualifying spouses and certain dependents can be covered by the Military Lending Act.

Federal law extends MLA protections to covered servicemembers and qualifying dependents. The CFPB specifically identifies spouses of covered service members and certain other dependents among those who may receive MLA protections.

If you obtained a CashNetUSA loan or payday loan while your spouse was serving on qualifying active duty, that relationship and the timing of the loan may therefore matter.

Do not assume that simply being married to someone who once served automatically establishes MLA coverage. The servicemember’s status at the relevant time and the federal definition of a dependent must still be considered.

What If the Payday Loan Was Not From CashNetUSA?

CashNetUSA is an important focus, but military payday-loan questions are not necessarily limited to one lender.

If you received a payday loan from another lender while serving on active duty, useful questions may include:

• Who was the lender?
• When was the loan made?
• Were you on active duty at the time?
• What state were you living in?
• Was it a payday loan, installment loan, line of credit, or another product?
• What APR and fees were disclosed?
• What costs may have been included in MAPR?
• Did the agreement contain an arbitration provision?
• Were payments automatically withdrawn?
• Was the loan renewed, refinanced, redrawn, or replaced with another loan?

None of those facts alone determines whether the law was violated. Together, however, they can help show what needs closer review.

Don’t Let the Scammers Win

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