E7-25119. Implementation of Limitations on Terms of Consumer Credit Extended to Service Members and Dependents

AGENCY:

Department of Defense.

ACTION:

Notice with request for comments.

SUMMARY:

The Department of Defense is preparing to draft a report to Congress and invites public comments and suggestions. An Item of Special Interest in the Senate Report 110-077 accompanying the National Defense Authorization Act for Fiscal Year 2008 (FY 2008 NDAA), requests the Department of Defense to report on the implementation of limitations on terms of consumer credit extended to Service members and dependents. The guidance from the Senate Armed Services Committee on drafting the report can be found at Senate Report 110-077, at pages 355-356, accompanying the FY 2008 NDAA.

DATES:

Comments must be received by February 25, 2008.

ADDRESSES:

You may submit comments, identified by docket number and/or RIN number and title, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Mail: Federal Docket Management System Office, 1160 Defense Pentagon, Washington, DC 20301-1160.

Instructions: All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the Internet at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT:

Mr. Marcus Beauregard, [phone].

SUPPLEMENTARY INFORMATION:

To help develop this report, the Department of Defense is seeking comments from the public about the potential negative impact of certain consumer loan products on Service members. Please indicate whether the following products, which are not currently regulated by 32 CFR 232.3, negatively impact Service members to the degree that the Department of Defense should regulate them. If regulation is needed, please provide proposed solutions. These products are:

• Installment loans, not covered in the definitions of credit in 32 CFR 232.3. These installment loans may include excessive fees and interest rates, loan flipping, and regular inclusion of high cost ancillary credit insurance products.
• Credit cards that are characterized by minimal available credit coupled with high fees.
• Fee-based, high-cost, courtesy overdraft products.

Additionally, the Department of Defense is seeking comments from the public on the implementation of 32 CFR part 232, specifically issues concerning:

• Disclosure requirements and identification of the covered borrower as required by 32 CFR 232.5 and 232.6.
• Implementation of alternative small-dollar credit products and recommended changes that can facilitate producing and delivering these products to Service members and their dependents.
• Oversight and enforcement of the regulation with respect to Internet-based lenders offering credit covered by the definitions in 32 CFR 232.3.
• Methods for the Department of Defense to use in monitoring enforcement of the rule. The Department of Defense has the authority to make regulatory changes and to recommend statutory change. The Department of Defense seeks input on potential changes for consideration.

L.M. Bynum,

OSD Federal Register Liaison Officer, Department of Defense.