Section 1 Short title
This Act may be cited as the “Military Lending Improvement Act of 2018”.
Military Lending Improvement Act of 2018
A BILL
To amend section 987 of title 10, United States Code, to expand and improve consumer credit protections for members of the Armed Forces and their dependents, and for other purposes.
Sec. 2 Expansion and improvement of consumer credit protections for members of the Armed Forces
Extension of applicability to individuals recently discharged or released from the Armed Forces— Paragraph (1) of subsection (i) of section 987 of title 10, United States Code, is amended to read as follows:
“(1) Covered member—The term covered member means the following:
“(A) A member of the armed forces who is—
“(i) on active duty under a call or order that does not specify a period of 30 days or less; or
“(ii) on active Guard and Reserve duty.
“(B) An individual who was separated, discharged, or released from duty described in subparagraph (A), but only during the 365-day period beginning on the date of separation, discharge, or release.”
Decrease in maximum authorized annual percentage rate on credit—
Decrease in rate— Subsection (b) of such section is amended by striking “36 percent” and inserting “24 percent”.
Effective date— The amendment made by paragraph (1) shall take effect on the date that is 180 days after the date of the enactment of this Act, and shall apply with respect to consumer credit extended on or after such effective date.
Prohibition on creditor use of auto tracking or kill switches— Subsection (e) of such section is amended—
in paragraph (6), by striking “or” at the end;
in paragraph (7), by striking the period at the end and inserting “; or”; and
by adding at the end the following new paragraph:
“(8) the creditor demands, as a condition for the credit, the application of—
“(A) a device that can locate or adjust the operations of the borrower’s motor vehicle by a third party; or
“(B) any other device or instrument that may pose a safety hazard or compromise the borrower’s privacy, as determined by the Secretary of Defense, in consultation with the Federal Trade Commission.”
Extension of coverage to credit for cars and other personal property—
Coverage— Subsection (i)(6) of such section is amended by striking “(A) a residential mortgage” and all that follows and inserting “a residential mortgage.”.
Effective date— The amendment made by paragraph (1) shall take effect on the date that is 180 days after the date of the enactment of this Act, and shall apply with respect to consumer credit extended on or after such effective date.
Regulations— The Secretary of Defense shall modify the regulations prescribed to carry out section 987 of title 10, United States Code, to take into account the amendments made by subsections (a) through (d) by not later than 180 days after the date of the enactment of this Act.
Sec. 3 Enhanced protection against debt collector harassment of members of the Armed Forces
Communication in connection with debt collection— Section 805 of the Fair Debt Collection Practices Act (15 U.S.C. 1692c) is amended by adding at the end the following:
“(e) Communications concerning servicemember debts
“(1) Definition—In this subsection, the term covered member has the meaning given the term in section 987(i) of title 10, United States Code.
“(2) Prohibition—A debt collector may not communicate, in connection with the collection of any debt, with the commanding officer or officer in charge of any covered member, including for the purpose of acquiring location information about the covered member.”
False or misleading representations— Section 807 of the Fair Debt Collection Practices Act (15 U.S.C. 1692e) is amended by adding at the end the following:
“(17) The false representation to any covered member, as defined in section 987(i) of title 10, United States Code, that failure to cooperate with a debt collection will result in prosecution under chapter 47 of title 10, United States Code (the Uniform Code of Military Justice).”
Sec. 4 Data protection standards for credit reporting agencies that use Department of Defense personnel data
Determination on adequacy of data protection standards— Not later than one year after the date of the enactment of this Act, the Secretary of Defense shall, in consultation with the Federal Trade Commission, determine whether or not each entity that downloads Military Lender Act bulk data from the Defense Manpower Data Center uses adequate safeguards to protect the downloaded data against breach or other potential misuse. The Secretary shall make the determination using a study of the practices of such entities conducted by the Secretary for purposes of this subsection.
Termination of access to bulk data— If pursuant to subsection (a), the Secretary determines that the safeguards of an entity described in that subsection are not adequate as described in that subsection, the Secretary shall terminate the access of the entity to bulk data described in that subsection by not later than 30 days after the date of the determination.
Restoration of access to bulk data— If access of an entity to bulk data is terminated pursuant to subsection (b), the Secretary may subsequently restore access of the entity to bulk data if the Secretary determines that the entity has taken remedial measures to ensure that any data downloaded from such bulk data is adequately protected against breach or other potential misuse.