Darwin Automotive updates platform based on latest Military Lending Act interpretation


F&I software provider Darwin Automotive announced on Tuesday that it has integrated smart disqualify technology into its F&I platform that can disqualify products based on Military Lending Act (MLA) qualifications.

The company said this technology is incorporated into the platform for all users, at no charge, to help protect dealers and finance companies and provide a high level of transparency to active duty service members.

Darwin Automotive recapped that the Military Lending Act was designed to protect active duty service members and their dependents in credit transactions and includes certain disclosures, arbitration provisions and a 36-percent interest rate cap on a finance agreement combined with ancillary and credit products.

Until recently, motor vehicle finance transactions were believed to be exempt from the act, and only auto title loans had to comply.

However, according to Darwin Automotive chief executive officer Phillip Battista, the Department of Defense's most recent interpretation, published last month, includes a set of rules that could retroactively put dealers and lenders in regulatory jeopardy.

“If a vehicle finance contract for active military members or their dependents includes financing for credit-related products or services, such as guaranteed asset protection or other types of credit insurance, or provides cash-out financing, the creditor, which would be the dealership or lender, must comply with the act,” Battista said.

“Products and services such as upgraded in-vehicle technology or extended warranties are related to the vehicle and are exempt from the rule. But credit-related products and services, such as GAP and credit life insurance, are related to the finance transaction, not the vehicle, so they are included under the act,” he continued.

“With Darwin, the needs of a consumer are paramount in determining which products and services can best fit those needs. Out of respect to men and women who have served, we want to provide the highest possible level of transparency at no cost and so have integrated MLA qualification screening into our Darwin platform at no charge to our dealer and lender clients,” Battista added.