Dealer couldn’t offer gap insurance due to MLA?

Curiosity question pretty much. Is this correct? And if so, why? Tried looking into it on google and got some differing articles on recent changes.

I had a pre-approved loan from Navy Federal to buy a car in Illinois. Had gap through them.

Was talking with the finance manager while he plugged stuff into their computer and he was walking me through their sales pitch stuff while he waited to see if Capital One could beat my current rate. He skipped over their gap insurance saying he couldn't offer it onto the loan due to me being in the military and the MLA preventing it. Ended up going with Navy Federal since it made life much simpler for me and only cost me a couple hundred more over the lifetime of the loan.

This was pretty weird for me, but I've only ever entertained financing with Navy Federal or a credit union back home since I've been in.