Military Auto Loan Case Becomes Dictionary Debate in 4th Circuit

Loans borrowed to in part finance a car purchase aren’t governed by the Military Lending Act, even when the loan covers additional costs, the Fourth Circuit found, affirming a trial court’s dismissal.

The Military Lending Act forces a lot of restrictions on consumer loans issued to active duty service members and their dependents, including a 36% interest cap, but auto loans secured by a car “for the express purpose of financing the purchase” are excluded from many of the law’s protections.

Army member Jerry Davidson argued that because part of his loan went to an extra insurance program, it should ...