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Is a loan made to purchase stock a money purchase loan for Military Lending Act (MLA) purposes?

It depends. There are three scenarios:

  1. A loan to purchase stock that is secured by the stock being purchased is exempt from the MLA. Stock is personal property, and as such, would be a money purchase loan, which is exempt.
  2. A loan to purchase stock but not secured by that stock is a covered loan under the MLA, just like any other unsecured loan.
  3. A loan secured by stock but not used to purchase the stock is covered because it is not a purchase money loan, which is exempt.

(October 2017)

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