Servicemembers Civil Relief Act
Information for active duty military members and their dependents
The Servicemembers Civil Relief Act (SCRA) is a federal statute passed by Congress to allow military members to suspend or postpone some civil obligations so that the military member can devote his or her full attention to military duties. The original Soldiers' and Sailors' Civil Relief Act was passed during World War I. The statute was reenacted during World War II, and was later modified during Operation Desert Storm. The Servicemembers Civil Relief Act amended the Soldiers’ and Sailors’ Civil Relief Act and was signed into law on December 19, 2003.
The SCRA is designed to protect active duty military members, reservists who are in active federal service, and National Guardsmen who are in active federal service. Some of the benefits under the SCRA extend to dependents of active duty military members as well.
Department of Defense Publishes Rule on Credit Products for Active Duty Service Members
The Department of Defense (DOD) published final rules for the limits and terms that will govern the extensions of credit to active duty service members and their dependents. The John Warner National Defense Authorization Act of 2007 required the rules, which go into effect on October 1, 2007. DOD said the goal of its regulation is to isolate detrimental credit products without impeding the availability of favorable installment loans. The rules do not cover mortgages or auto purchase loans or other loans that do not meet the definition of consumer credit spelled out in the regulations. The regulations define such loans as payday loans, vehicle loans and tax refund anticipation loans. The rules require additional disclosures for covered loans and set a maximum military annual percentage rate of 36 percent. The rules preempt state law unless the state law would provide greater protections to the borrowers.
Additional Resources
- American Forces Information Service (DOD)
- Mortgage Payment Relief: Questions & Answers (HUD)
- Service Members Civil Relief Act of 2003 (FDIC)
