NADA Announces Withdrawal of DOD Interpretive Rule on Military Lending Act

The National Automobile Dealers Association (NADA) announced today that the U.S. Department of Defense (DOD) is withdrawing the portion of its December 2017 Interpretive Rule that had “effectively prevented auto dealers from making Guaranteed Asset Protection (GAP) Waiver coverage available to service members, who previously were able to voluntarily purchase GAP waiver to protect against the personal financial risk that arises when a vehicle is declared a total loss.” Click here to review the entire NADA Press Release (Feb. 27, 2020). Dealers should consult the finance companies they work with to confirm each lender’s position on whether they will accept assignment of finance agreements that include GAP waivers or other credit insurance products sold to servicemembers and other individuals covered by the Military Lending Act as a result of this outcome.

Congratulations to NADA Regulatory Affairs on their leadership on this issue! NADA and the American Financial Services Association (AFSA) promptly filed a joint petition in January 2018 challenging DOD’s Interpretive Rule, and have followed this issue for more than two years in reaching this result.