Legal Assistance: The John Warner National Defense Authorization Act for Fiscal Year 2007 and Protecting Soldiers Against Predatory Lending

Abstract

As of 1 October 2007, provisions of the John Warner National Defense Authorization Act (NDAA) and subsequent Department of Defense (DOD)-issued regulations establish new protections for Soldiers and their dependents from the many lending traps that target the military. Collectively known as the Military Lending Act, these laws and regulations specifically circumscribe the conduct of pay-day lenders, title loan companies, and providers of tax refund anticipation loans. The Military Lending Act requires the lender to disclose certain terms to Soldiers and their dependents. These disclosure requirements serve two purposes: (1) to ensure that the Soldier is aware that greater protections exist for Soldiers and their dependents, and (2) to ensure that the Soldier understands the terms and conditions of the loan before completing the transaction. Additionally, the regulations specifically prohibit certain conduct by the lender. Violations of these regulations may result in making the entire lending agreement void and creating a cause of action against the lender.

Keywords: Predatory lending, Soldiers, Military