KeyBank / Laurel Road MLA Investigation
Do you believe your rights under the Military Lending Act have been violated by KeyBank or Laurel Road?
If you are a member of the armed forces, you and your spouse are provided extra protection from unscrupulous and immoral lending practices. Federal law provides for, at least, a potential refund of all fees and interest paid, and up to $500 for each violation of your rights.
If KeyBank or Laurel Road is charging you more interest than permitted under federal law, please contact Peiffer Wolf for a FREE Consultation by filling out our questionnaire.
MLA | Who is protected?
The MLA protects all “covered borrowers.” A “Covered Borrower” under the MLA includes active-duty servicemembers, Reserve and National Guard on active duty, and their dependents. Active duty means called up or ordered to serve more than 30 days. 32 C.F.R. § 223.3(g)(1).
MLA | What Loans are Covered?
The MLA was amended in 2016 (32 C.F.R. § 232) to cover any credit extended primarily for personal, family, or household purposes that is: (a) subject to a finance charge; i.e., interest is charged, or (b) payable by a written agreement in more than four installments. As a result, the MLA now covers a wide variety of credit, including installment loans, personal loans, and refinanced student loans.
What requirements and prohibitions are imposed on covered loans and lenders?
The MAPR. Covered loans may not charge a military annual percentage rate of interest (MAPR) exceeding 36%.
In calculating the MAPR, the lender must include the cost of other credit related products, including, but not limited to, application fees, a debt cancellation policy, credit life policy, or debt suspension policy. Failure to include these costs in calculating the MAPR, falsely understate the actual rate.
If the listed rate of interest in your contract is at or near 36%, and the lender asks you to pay other fees (excluding late fees) that have not been included in calculating that rate, it is likely that the actual MAPR is illegally high. (If state law imposes a lower maximum interest rate, the contract must comply with that state law as well.)
Examples includes:
- Loan Application Fees
- Finance charges
- Credit insurance premiums
- Add-on credit-related products sold in connection with the credit
- Fees like participation fees, or fees for debt cancellation contracts, with some exceptions.
Forced Arbitration. Many contracts require consumers to give up their right to sue the lender or to be a member of a class action lawsuit; instead agreeing to resolve all disputes through arbitration. Most of the time, such contracts are between two parties of vastly unequal bargaining power: for example, a consumer contract with a bank, lender, or credit card issuer.
As a condition of purchasing the loan, or financing the sale, the consumer must agree to binding arbitration even before there’s any dispute.
Such pre-dispute, or “forced” arbitration provisions are prohibited in contracts covered by the MLA.
If you are a member of the armed forces, and you and your spouse have taken out a personal loan or refinanced a student loan through KeyBank or Laurel Road that included an arbitration agreement in form language, you could be entitled to up to $500 in compensation and a potential refund of any interest paid.
If KeyBank or Laurel Road is charging you more interest than permitted under federal law, please contact Peiffer Wolf for a FREE Consultation by filling out our questionnaire.
MLA Litigation | Peiffer Wolf
Casework is handled by Peiffer Wolf Partner Brandon Wise who founded and manages Peiffer Wolf’s St. Louis, Missouri office. His practice is focused on a wide variety of class and mass cases, including an emphasis on mass arbitration. Brandon leads the firm’s data privacy practice and is a tireless advocate for individual’s privacy rights.
Brandon is joined by Domenica Russo who is an Associate in the St. Louis Office. Domenica represents plaintiffs in privacy and consumer protection cases. Following her undergraduate degree, she commissioned as an Officer in the United States Army. Domenica spent four years as an Army Engineer Officer. During her time in the military, she was stationed in Fort Leonard Wood, Fort Drum, and Erbil, Iraq. She received multiple awards and honors for her service.