Servicemembers Civil Relief Act Amendments
By Capt. Benjamin Hernandez-Stern , 129th Rescue Wing Legal Office
/ Published January 09, 2011
MOFFETT FEDERAL AIRFIELD, Calif. -- President Barack Obama signed the Veterans Disability Protection Act of 2010, which made substantial improvements to the Servicemembers Civil Relief Act (SCRA) in October of last year.
The 2010 amendments augment the protections that were enacted in 2008 that updated SCRA for the twenty-first century.
The amendments expanded the right to terminate cellular phone service and clarified deployed servicemembers rights to terminate residential leases. Additionally, the amendments formalized their private right of action to sue under SCRA.
SCRA protects those persons who serve on Title 10 status for the nation's defense, from adverse consequences to their legal rights that may be a result from their service. Generally, SCRA protections begin the first date of the active Title 10 period, and may extend from 30 days up to 180 days after the member is released from Title 10 status depending on the circumstances.
SCRA protections include:
Protection of Credit Information
A credit agency may not identify a member's status as guard or reserve because such identification may cause a lender to deny or revoke credit, change credit terms or view the credit report negatively against the member.
A member may reduce the higher interest rates the member pays for any financial obligation (credit card, loan, and mortgage) individually or jointly entered into before active service to six percent if active service materially affects the member's ability to repay the financial obligation. In addition, the SCRA prohibits the lender from accelerating the principal amount owed, and forgives, versus defers the excess interest payments that would have been due under the higher interest rate so that the member is not liable for the excess after he or she is released from active service. This reduced interest rate is effective only during the period of active military duty for most obligations; however, for a mortgage obligation, the reduced interest rate continues for one year following release from military service. Finally, this reduced rate does not apply to financial obligations (including refinancing or credit card balance increases) entered into or accrued while on active service, or to federal guaranteed student loans.
Termination of Automobile Leases
The SCRA contains a protection that allows a member to terminate an automobile lease that the member signed either before or during active duty if the member meets certain conditions. Generally, a reserve or guard member must, after entering the lease, be called to active duty service for at least 180 days or more. An active duty member must, after entering the lease, EITHER (a) receive military orders for a permanent change of station either i) from the continental United States (CONUS) to outside CONUS or (ii) from a state outside CONUS to any location outside that state OR (b) deploy for 180 days or more. Terminating the lease requires written notice to the lessor with a copy of military orders.
Termination of Real Estate Leases
A member may terminate, without penalty, leases and rental agreements entered into before or during active military service for real estate properties (i.e., residences, businesses) if the member meets certain conditions. Previously, the SSCRA did not permit such terminations if the lease or rental agreement was entered into during active service. Generally, the member must be called to active duty service for at least 90 days, or receive military orders for a permanent change of station or orders to deploy for at least 90 days. Such terminations also terminate any obligation of the member's dependents under the lease. Terminating the lease requires written notice to the lessor with a copy of military orders.
Termination of Cell Phone Contracts
Cell phone installment contracts are also protected. These contracts may be cancelled or suspended if the servicemember is deployed overseas for 90 days or longer or if he makes a permanent change-of-station (PCS) move. The servicemember may cancel or suspend the cell phone contract without penalties or extra fees as long as the deployment or PCS materially affects the servicemember's ability to satisfy the contract or utilize the service.
The material in this handout represents general legal principles. The law is continually changing; although the information in the handout was current as of the date it was drafted, some provisions may have changed. Prior to deploying, contact the JAG office for guidance on how to take advantage of these protections.