Military banking is defined, not only by its focus on military members and veterans as customers but also by the unique legal regime that governs it. To ensure that financial institutions treat active military personnel and their families fairly, Congress enacted the Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA). The Community Reinvestment Act (CRA) gives banks with large military, veteran, and family customer bases credit for their global reach and for the challenges their customers face. These and many other laws and regulations form part of the fabric of military banking. It is AMBA's mission to ensure they are interpreted, enforced, and modified in ways that encourage banks to support and serve the military and veteran communities and that protect military and veteran customers.
AMBA has been active throughout the development and implementation of the Military Lending Act. The MLA essentially places a 36% “Military Annual Percentage Rate” cap on all loans to military members and their dependents. AMBA’s continuing involvement in interpreting and applying the MLA statute and its implementing regulations is focused on ensuring fairness for both banks and their military customers.
The SCRA exists to prevent entities engaged in financial transactions with military members from taking unfair advantage of their long absences from home, deployments, and assignments abroad. AMBA’s role is to educate its members and to engage with government agencies on issues involving the application of SCRA to banks.
AMBA has been an active participant in recent efforts of the Office of the Comptroller of the Currency and the Federal Reserve Board to update their CRA implementing regulations. As the only voice of banks with large military customer bases, AMBA has called the attention of these agencies to the difficulties inherent in defining a global military community in CRA’s local geography terms. We’ve made some headway, but there is much more discussion needed to adapt this 1970s-era law to 2020s-era realities.