Military Lending Act regulation
32 CFR 232.3: MLA Definitions, Covered Borrower to MAPR
Official heading: § 232.3 Definitions.
In one line
Defines the terms the whole rule turns on: covered member, dependent, covered borrower, consumer credit and its exceptions, creditor, and the Military Annual Percentage Rate.
- Covered member: active duty under orders that do not specify 30 days or fewer, or Active Guard and Reserve duty
- Consumer credit: personal-purpose credit with a finance charge or payable in more than four installments
- Excluded: residential mortgages, and loans expressly to buy a vehicle or other personal property secured by that purchase
Text checked October 10, 2026
What 32 CFR 232.3 does to your money
Whether a loan is MLA credit comes down to two definitions here. A “covered member” is serving on active duty under title 10, 14 or 32 orders that do not specify a period of 30 days or fewer, or on Active Guard and Reserve duty. A “covered borrower” is that member, or a dependent as 10 U.S.C. 1072(2) defines one, at the moment the credit is taken. “Consumer credit” is credit for personal, family or household purposes that carries a finance charge or is payable in more than four installments.
The exceptions in paragraph (f)(2) are where most confusion lives. A residential mortgage, including a refinance, home equity loan or line of credit, or reverse mortgage, is outside the rule. So is a loan expressly intended to finance a motor vehicle purchase and secured by that vehicle, and a loan to buy other personal property secured by the item bought. That is why a dealer car loan is not MLA credit while a title loan or a cash personal loan is.
A creditor that checks your status the way § 232.5 describes and keeps the record gets a conclusive answer, and paragraph (f)(2)(v) excludes the credit if that check says you are not covered. Coverage also ends with your status under paragraph (g)(4). If a lender tells you a product is “not covered”, these are the definitions to hold it to.
Guides on this site that apply 32 CFR 232.3
- MLA Covered Borrowers: Who the 36% Cap Protects
The MLA covers active duty, Guard/Reserve on qualifying orders, and dependents, not veterans or retirees. Plus the DoD database check and lender safe harbor.
- MLA Covered Credit: What Loans the 36% Cap Reaches
The MLA covers payday, title, installment, and most credit cards, but excludes mortgages and purchase-money car loans. What counts as covered consumer credit.
- 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.
- Affirm SCRA: 6% Cap on Pre-Service Loans, Filed by Webform
Affirm publishes a 6% SCRA cap for loans opened before active duty and takes requests by webform, not mail. What to attach, the refund math, and your letter.
- Best Bank for Veterans: Chase Waives $25, U.S. Bank $12, on a DD-214
Chase waives its $25 Premier Plus fee and U.S. Bank its $12 fee for veterans who show a DD-214. Wells Fargo needs VA or retired pay deposited. What ends at ETS.
- Does the SCRA Apply to Personal Loans? Yes: 6% If Signed Before Duty
Yes. A personal loan signed before active duty caps at 6% under § 3937, fees included, back to day one. Eight lenders' SCRA desks, each read September 2, 2026.
- GM Financial SCRA: 1-855-719-9693 & the 6% Auto Rate Cap
GM Financial caps pre-service retail contracts at 6% in print and replies in about eight business days. Estimate your refund and generate the letter.
- How to Use the SCRA With Any Auto Lender
Toyota Financial, Ally, GM Financial, Westlake, Exeter, Carvana, Credit Acceptance: one SCRA process. The 6% cap, repossession shield, and how to file.
- Military Car Loans: 3.89% at Navy Federal, No MLA Cap at the Dealer
Purchase-money car loans sit outside the MLA 36% cap; the SCRA 6% cap reaches only pre-service debt. Credit union APRs read Sep 2, 2026, and the $10,269 math.
- Santander & Chrysler Capital Military Benefits: 6% SCRA
A pre-service Santander or Chrysler Capital auto loan caps at 6%, and repossession needs a court order. Estimate your refund and generate the letter.
- Toyota Financial SCRA: 6% Rate Cap on Pre-Service Auto Loans
Toyota Financial publishes no SCRA rate and no SCRA line, so 6% and written notice govern. Estimate your refund and generate the letter to send.
The full text of 32 CFR 232.3
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.
As used in this part:
(a) Affiliate means any person that controls, is controlled by, or is under common control with another person.
(b) Billing cycle has the same meaning as “billing cycle” in Regulation Z.
(c) Bureau means the Consumer Financial Protection Bureau.
(d) Closed-end credit means consumer credit (but for the conditions applicable to consumer credit under this part) other than consumer credit that is “open-end credit” as that term is defined in Regulation Z.
(e) Consumer means a natural person.
(f)(1) Consumer credit means 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.
(2) Exceptions. Notwithstanding paragraph (f)(1) of this section, consumer credit does not mean:
(i) A residential mortgage, which is any credit transaction secured by an interest in a dwelling, including a transaction to finance the purchase or initial construction of the dwelling, any refinance transaction, home equity loan or line of credit, or reverse mortgage;
(ii) Any credit transaction that is expressly intended to finance the purchase of a motor vehicle when the credit is secured by the vehicle being purchased;
(iii) Any credit transaction that is expressly intended to finance the purchase of personal property when the credit is secured by the property being purchased;
(iv) Any credit transaction that is an exempt transaction for the purposes of Regulation Z (other than a transaction exempt under 12 CFR 1026.29) or otherwise is not subject to disclosure requirements under Regulation Z; and
(v) Any credit transaction or account for credit for which a creditor determines that a consumer is not a covered borrower by using a method and by complying with the recordkeeping requirement set forth in § 232.5(b).
(g)(1) Covered borrower means a consumer who, at the time the consumer becomes obligated on a consumer credit transaction or establishes an account for consumer credit, is a covered member (as defined in paragraph (g)(2) of this section) or a dependent (as defined in paragraph (g)(3) of this section) of a covered member.
(2) The term “covered member” means a member of the armed forces who is serving on:
(i) Active duty pursuant to title 10, title 14, or title 32, United States Code, under a call or order that does not specify a period of 30 days or fewer; or
(ii) Active Guard and Reserve duty, as that term is defined in 10 U.S.C. 101(d)(6).
(3) The term “dependent” with respect to a covered member means a person described in subparagraph (A), (D), (E), or (I) of 10 U.S.C. 1072(2).
(4) Notwithstanding paragraph (g)(1) of this section, covered borrower does not mean a consumer who (though a covered borrower at the time he or she became obligated on a consumer credit transaction or established an account for consumer credit) no longer is a covered member (as defined in paragraph (g)(2) of this section) or a dependent (as defined in paragraph (g)(2) of this section) of a covered member.
(h) Credit means the right granted to a consumer by a creditor to defer payment of debt or to incur debt and defer its payment.
(i) Creditor, except as provided in § 232.8(a), (f), and (g), means a person who is:
(1) Engaged in the business of extending consumer credit; or
(2) An assignee of a person described in paragraph (i)(1) of this section with respect to any consumer credit extended.
(3) For the purposes of this definition, a creditor is engaged in the business of extending consumer credit if the creditor considered by itself and together with its affiliates meets the transaction standard for a “creditor” under Regulation Z with respect to extensions of consumer credit to covered borrowers.
(j) Department means the Department of Defense.
(k) Dwelling means a residential structure that contains one to four units, whether or not the structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and manufactured home.
(l) Electronic fund transfer has the same meaning as in the regulation issued by the Bureau to implement the Electronic Fund Transfer Act, as amended from time to time (12 CFR part 1005).
(m) Federal credit union has the same meaning as “Federal credit union” in the Federal Credit Union Act (12 U.S.C. 1752(1)).
(n) Finance charge has the same meaning as “finance charge” in Regulation Z.
(o) Insured depository institution has the same meaning as “insured depository institution” in the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
(p) Military annual percentage rate (MAPR). The MAPR is the cost of the consumer credit expressed as an annual rate, and shall be calculated in accordance with § 232.4(c).
(q) Open-end credit means consumer credit that (but for the conditions applicable to consumer credit under this part) is “open-end credit” under Regulation Z.
(r) Person means a natural person or organization, including any corporation, partnership, proprietorship, association, cooperative, estate, trust, or government unit.
(s) Regulation Z means any rules, or interpretations thereof, issued by the Bureau to implement the Truth in Lending Act, as amended from time to time, including any interpretation or approval issued by an official or employee duly authorized by the Bureau to issue such interpretations or approvals. However, for any provision of this part requiring a creditor to comply with Regulation Z, a creditor who is subject to Regulation Z (12 CFR part 226) issued by the Board of Governors of the Federal Reserve System must continue to comply with 12 CFR part 226. Words that are not defined in this part have the same meanings given to them in Regulation Z (12 CFR part 1026) issued by the Bureau, as amended from time to time, including any interpretation thereof by the Bureau or an official or employee of the Bureau duly authorized by the Bureau to issue such interpretations. Words that are not defined in this part or Regulation Z, or any interpretation thereof, have the meanings given to them by State or Federal law.
(t) Short-term, small amount loan means a closed-end loan that is:
(1) Subject to and made in accordance with a Federal law (other than 10 U.S.C. 987) that expressly limits the rate of interest that a Federal credit union or an insured depository institution may charge on an extension of credit, provided that the limitation set forth in that law is comparable to a limitation of an annual percentage rate of interest of 36 percent; and
(2) Made in accordance with the requirements, terms, and conditions of a rule, prescribed by the appropriate Federal regulatory agency (or jointly by such agencies), that implements the Federal law described in paragraph (t)(1) of this section, provided further that such law or rule contains:
(i) A fixed numerical limit on the maximum maturity term, which term shall not exceed 9 months; and
(ii) A fixed numerical limit on any application fee that may be charged to a consumer who applies for such closed-end loan.
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.