The U.S. Department of Defense (DoD) has expanded the types of credit products that are covered by a 36% rate cap and other military-specific protections under the Military Lending Act (MLA) through a final rule.

The final rule broadens the definition of “consumer credit” from the original narrow parameters under the MLA, which defined “consumer credit” products as:

• closed-end payday loans for no more than $2,000 and with a term of 91 days or fewer;
• closed-end auto title loans with a term of 181 days or fewer; and
• closed-end tax refund anticipation loans.

Under the new definition, the DoD said the term would be "be defined consistently with credit that for decades has been subject to the disclosure requirements of the Truth in Lending Act (TILA), codified in Regulation Z, namely: credit offered or extended to a covered borrower primarily for personal, family, or household purposes, and that is (i) subject to a finance charge or (ii) payable by a written agreement in more than four installments."

The MLA regulation would, however, continue to exclude residential mortgages and credit extended to finance the purchase of, and secured by, personal property, such as vehicle purchase loans.

The rule goes into effect on Oct. 1, 2015, and compliance is required by Oct. 3, 2016.