For some a military career is more than a job – it is a calling to serve and protect. But whatever the reason a person decides to serve, it’s not the same as my 9-5 desk job. On days like Veterans Day, I often wonder what I can do to support those who take on such a great responsibility. As a banking professional, it’s part of my job to understand laws like the Servicemembers Civil Relief Act (SCRA) and how they affect lending at my bank. It is important to make sure our customers who serve are aware of how these laws provide protection for them and their families.
The SCRA postpones or suspends certain civil obligations so service members can concentrate on the job at hand and relieve stress on both the service member and their families during periods of “active duty.” This law covers such items as:
- High interest rate debt
- Pending trials or judgments
- Eviction from housing
- Termination of lease
- Life insurance protection
- Health insurance protection
- Tax liabilities
For example, one of the most commonly applied protections is the six percent interest rule. This rule provides relief to service members (and their spouses for joint debt) on higher interest rate debts incurred before the service member joined the military. During active duty and for up to one year after for certain obligations such as a mortgage, a service member can request to have interest rates on their loans limited to 6% per year. Interest that would have accrued over 6% is forgiven by the lender, and monthly payments are reduced to reflect the 6% rate. As with many of the protections under the law, it is not automatic. The service member must notify the lender of their active duty status and provide documentation. Once they do, the 6% benefit applies retroactively to the first day of active duty status.
For more information on this and all the protections provided by the Servicemembers Civil Relief Act, visit Military.com, the U.S. Department of Housing and Urban Development, or to find U.S. Armed Forces Legal Assistance, click here.
This Veterans Day I’d ask us all to remember how much we’ve gained from those who have served. Be thankful. And please share this information with family, friends, neighbors, and co-workers who are serving today.