WASHINGTON -(Dow Jones)- Federal Deposit Insurance Corp. Chairman Sheila Bair said her agency has not had any discussions with the Department of Defense about a recent law passed that would prohibit lenders from charging interest rates over 36% to members of the military or their family.

"I think I am going to call them, actually," Bair said in a speech to the American Bar Association. "We haven't heard from them. I understand through the grapevine that they want to work with us closely on this. I think it's really important."

The law, which passed last week, has already triggered an outcry from both the banking industry and bank regulators because it gives the Defense Department the ability to write rules implementing the new law. Regulators have said the new law conflicts with existing banking law and could make it hard for banks to comply.

Military officials have complained about thousands of service members losing their security clearance because of bad credit caused by predatory or deceptive loan practices.

The interest-loan cap does not apply to home mortgages and car loans, but it does apply to things such as credit cards and other consumer loans.

The law is supposed to go into effect in October 2007.

-By Damian Paletta, Dow Jones Newswires; 202-862-9241; Damian.Paletta@ dowjones.com