Military Lending Act regulation
32 CFR 232.2: When the Military Lending Act Applies to a Loan
Official heading: § 232.2 Applicability; examples.
In one line
Fixes the moment that matters: the rule applies to credit only if the borrower was covered when they became obligated or opened the account, and it stops applying once they are no longer covered.
- Coverage is tested when you sign or open the account, not later
- A loan taken before active duty never becomes MLA credit
- Regulation Z controls the meaning of any Truth in Lending term the examples use
Text checked October 10, 2026
What 32 CFR 232.2 does to your money
The MLA asks one question about timing, and the answer decides whether the 36% cap, the arbitration ban and the rest apply at all. Under § 232.2(a)(1) the rule covers consumer credit only when the consumer is a covered borrower at the time they become obligated on the transaction or establish the account. Nothing in the part applies to an account opened while you were not covered, and nothing applies once you are no longer a covered borrower.
The rule’s own example makes it concrete. A reservist with a closed-end loan from before activation gets orders and then opens a line of credit for personal purposes. The line of credit is MLA credit; the earlier loan never is. A year later the member leaves active duty, and the MLA stops applying to the line of credit too. Coverage ends with status, a point 32 CFR 232.3(g)(4) repeats, which is why this site never says MLA protection lasts for the life of a loan.
Debt from before active duty belongs to the SCRA: its 6% cap in 50 U.S.C. § 3937 reaches exactly the loans the MLA leaves out. A dependent of a covered member is a covered borrower too, under the definitions in § 232.3, so a spouse’s loan taken during the member’s active duty is MLA credit in its own right.
Guides on this site that apply 32 CFR 232.2
- Armed Forces Loans of Nevada Is Not Accepting New Applications
Its application page says it is not accepting new applications (read October 9, 2026). For borrowers: MAPR 9.95% to 35.95%, how to pay, and 0% options.
- National Guard and Reserve MLA: Covered Only on Orders Over 30 Days
The MLA covers Guard and Reserve members on orders not specifying 30 days or fewer, judged the day you open the account. Which orders count, and when it ends.
The full text of 32 CFR 232.2
From the eCFR, current through October 7, 2026; this section was last amended December 5, 2016 (official source, retrieved October 10, 2026). House style: em dashes in the official text are shown as colons or periods; no word is changed.
(a)(1) Applicability. This part applies to consumer credit extended by a creditor to a covered borrower, as those terms are defined in this part. Nothing in this part applies to a credit transaction or account relating to a consumer who is not a covered borrower at the time he or she becomes obligated on a credit transaction or establishes an account for credit. Nothing in this part applies to a credit transaction or account relating to a consumer (which otherwise would be consumer credit) when the consumer no longer is a covered borrower.
(2) Examples: (i) Covered borrower. Consumer A is a member of the armed forces but not serving on active duty, and holds an account for closed-end credit with a financial institution. After establishing the closed-end credit account, Consumer A is ordered to serve on active duty, thereby becoming a covered borrower, and soon thereafter separately establishes an open-end line of credit for personal purposes (which is not subject to any exception or temporary exemption) with the financial institution. This part applies to the open-end line of credit, but not to the closed-end credit account.
(ii) Not a covered borrower. Same facts as described in paragraph (a)(2)(i) of this section. One year after establishing the open-end line of credit, Consumer A ceases to serve on active duty. This part never did apply to the closed-end credit account, and because Consumer A no longer is a covered borrower, this part no longer applies to the open-end line of credit.
(b) Examples. The examples in this part are not exclusive. To the extent that an example in this part implicates a term or provision of Regulation Z (12 CFR part 1026), issued by the Consumer Financial Protection Bureau to implement the Truth in Lending Act, Regulation Z shall control the meaning of that term or provision.
Every MLA guide on this site is on the Military Lending Act hub; the SCRA, which covers debt from before active duty, is on its own section-by-section index.
Heads up: SCRA Saver publishes general information, not legal or financial advice. Laws change and every situation differs. Confirm details with your installation legal assistance office (free for service members) or a licensed professional.