Thank You Payday Loans! You’re actually good for something- Chase implements Military Lending Act

Greeting everyone.  Here is to the launch of military miles and finance.  While in the military, I’ve slowing picked up on the knowledge of discounts and benefits that we are able to access being members of the military.  I remember how great it felt when I found out American Express waives their annual fee for members of the military but also regret that I didn’t find out about it sooner.

What I envision for this site is a one stop shop of all military discounts and benefits that I’ve pick up from my time in the military so it doesn’t take years to take advantage.  I plan to cover primarily on travel related discounts but will also talk about everyday discounts and finances  as well.  Eventually, I’m hoping to have it broken down by major military locations.  With that lets get to work!

Bottom Line Up Front (BLUF):

  • Chase waives annual credit card fees to all cards that military personnel apply for after 20 Sept 2017.
  • This benefit also is passed to all their dependents as well.

I never in 100 years did i think that I would ever thank Pay Day loans agencies for anything!  These “services” are a financial death trap sometimes charging 400% APR or more on their loans.  They specifically target our younger enlisted members that may have gotten in some financial trouble and  try to solve it themselves with these loans.  This is the equivalent of putting out a match with gasoline.  Although, there’s nothing like that feeling when you’re TDY and lost but know you’re close to the base since you’re surrounded by strip clubs, tattoo parlors, seedy bars, and these loan sharks.

The original MLA of 2006 was intended to put these guys out of business.  It specifically went after:

  • Closed-end payday loans;
  • Closed-end auto title loans; and
  • Closed-end tax refund anticipation loans.

But you gotta give them credit for not giving up without a fight.  They just modified the loan’s fine print and created additional fees to still peddle these shitty products to our guys and girls.  After Congress and the DoD got wind of this they decided to counter these guys once and for all, although its looks like they had unintended effects.

And here is the current version:

Current MLA Benefits

Now here is the critical detail that allows everyone in the military to benefit.  How a lot of the pay day loan agency’s got around the original MLA was to take on transaction and insurance fees that were not technically labeled as the interest on the loan.  The new MLA was designed to cover that aspect as well.  Now this is where the lawyers played the what if game. In the what if game, I can get one of these high premium fee (but justified because of all the benefits) credit cards and just charge $1.  Well on that $1 loan, I was just charged $450-$550 for my annual fee, which is obviously way more that the allowed 36% military APR.

All credit cards are supposed to be in compliance by Oct 3 2017.   So my interpretation of why the current MLA is better than the Servicemembers Civil Relief Act(SCRA) for credit cards.

  • MLA applies for to all credit cards applied for after 1 Oct 2017 while SCRA only applies if you had the credit card prior to going on active duty.   *AMEX waives all fees prior to MLA but that was technically above and beyond SCRA regulations.
  • MLA applies to military and there dependents, SCRA only applies to the service member.  Meaning, both you and your spouse can individually apply for credit cards.

It looks like Chase added a little buffer room and settled on an internal cut off date of 20 Sept 2017.

Chase MLA acknowledgment letter

Chase interprets the MLA:

  • Your Military Annual Percentage Rate (MAPR) won’t be more than 36%.
  • If you have a promotional or introductory rate, you’ll keep it for existing balances until it expires.
  • Your contract rate won’t be impacted and will remain as outlined kin your cardmember agreement.
  • We won’t charge you fees, other than late fees and non-sufficient funds fees, if applicable.

So what is the first thing to do with this update?  Go get there flagship card, The Chase Sapphire Reserve(*Referral link).  Even if you don’t ever use it, you get Priority Pass for you AND your entire traveling party, and comes with a $300 annual travel credit that can be applied for airfare, hotels, taxis and even parking fees. In a following post, I’ll explain in details about the full benefits of this card.

 

#1 Credit Card to get for military if you don’t have it already. * Referral link above


After you get the card, give their military hotline a call and request for a waiver of the annual fee under the Military Lending Act.

Now the only premium credit card not free to military is the Citi Prestige but from how the MLA reads and how Chase interpreted it, they shouldn’t be far behind.

Has anyone already gotten the waivers themselves?  Have you had any trouble getting the waiver?