Servicemen and -women can face unique financial challenges during their service.
Here we will discuss federal service member protections and provide resources that can help you navigate your finances during your military service.
Service Member Protections Basics
Recognizing the unique and significant challenges faced by military personnel and their families, the Servicemembers’ Civil Relief Act (SCRA) was enacted in 2003 to provide specific protections to all active-duty service members. These include Army, Air Force, Coast Guard, Marine Corps, and Navy (including reservists), members of the National Guard and Air National Guard who have been activated for duty, and active-service commissioned officers of the Public Health Service and National Oceanic and Atmospheric Administration. Many SCRA provisions also extend to spouses and other dependents.
Consumer Protections for Service Members
Under the SCRA, the interest rates on any credit card, mortgage, student loan (federally guaranteed or private) ,and other loans a service member or their spouse obtained before entering active duty can be capped at 6 percent per year for the period the service member remains on active duty.
Additional SCRA protections include:
- Safeguards for lease cancellations and evictions for service members who rent their homes.
- Delay of all civil court actions, such as bankruptcy or foreclosure. Courts must grant active duty service members a stay in cases where current military duty requirements materially affect the member's ability to appear.
- Prohibiting lenders from retaliating against service members who claim any of the law's protections by reporting negative information to credit reporting agencies or refusing credit in the future.
Relief under the SCRA may not be automatic. Generally, a service member must affirmatively invoke, or request, protection. Therefore, it is important to become familiar with the law’s provisions and work with an Armed Forces Legal Assistance Office to identify and invoke any SCRA protections that apply to your particular circumstances.
Military Consumer (Federal Trade Commission, Department of Defense, Consumer Financial Protection Bureau, Military America Saves )