Handout: SCRA and MLA protections (2024)

FAQs

Is MLA better than SCRA? ›

The Military Lending Act is more recent. But what are the differences between the SCRA and the MLA? First, the SCRA is much more expansive, but generally only affects debts and obligations incurred before active duty. Also, the MLA covers mostly consumer transactions entered into while in active service.

The MLA provides protections to servicemembers and their dependents for credit extended while the servicemember is serving on active duty. In contrast, the SCRA protects servicemembers and their dependents with obligations incurred prior to entry into active duty.

The SCRA caps interest rate charges, including late fees and other transaction fees, at 6 percent. The MLA limits interest rates and fees to 36 percent Military Annual Percentage Rate (MAPR).

The SCRA enables servicemembers to devote their time and attention to the defense needs of the Nation by providing protections related to such things as rental agreements, security deposits, prepaid rent, evictions, installment contracts, credit card interest rates, automobile repossessions, mortgage interest rates, ...

Mortgages, home equity loans, lines of credit and certain secured loans, including secured auto loans, are not covered under the MLA.

Why Use MLA? Using MLA Style properly makes it easier for readers to navigate and comprehend a text through familiar cues that refer to sources and borrowed information. Editors and instructors also encourage everyone to use the same format so there is consistency of style within a given field.

Persons Not Entitled to Benefits

Reservists or National Guard personnel not in an active-duty status are not covered under the SCRA. Also, the statute does not protect retired personnel. Servicemembers who may fall under the SCRA's protections, may lose those shields due to the servicemember's own misconduct.

A creditor cannot: Use the title of a vehicle as security for the obligation involving the consumer credit. prepaying all or part of the consumer credit. after the extension of credit in an account established in connection with the consumer credit transaction.

A lender can't revoke your loan or credit account, change the terms of your credit, or refuse to grant you credit just because you exercised your SCRA rights. In addition, a lender can't furnish negative information to a credit reporting company just for invoking your SCRA rights.

The MLA does not cover military retirees, unless they are also dependents of a borrower who is eligible for protections under the MLA. Same-sex spouses and certain unremarried former spouses may also be covered under MLA. *Military dependents are specifically defined under MLA as follows: Spouses.

What type of credit is excluded from MLA? ›

What types of loans are NOT covered under the MLA? Answer: There are some loans the MLA doesn't cover – namely, credit that is secured by the property being purchased and certain other secured loans.

If you took out an automobile, home, or student loan or incurred credit card debt prior to becoming a servicemember (also known as a “pre-service obligation”), or if you took out such a loan jointly with your spouse, then you are entitled to have your interest rate reduced to a maximum of 6 percent per year.

Your rights under the MLA include: A 36% interest cap. You can't be charged more than a 36% Military Annual Percentage Rate (MAPR), which includes the following costs in calculating your interest rate (with some exceptions):

Among other things, the SCRA allows for forbearance and reduced interest on certain obligations incurred prior to military service, and it restricts default judgments against servicemembers and rental evictions of servicemembers and all their dependents.

No, the SCRA caps the interest rate for pre-service debt only. SCRA interest rate benefit coverage isn't affected by deployment. Only loans you took out prior to Active Duty are covered by the SCRA.

Answer: The MLA applies to active duty servicemembers (including those on active Guard or active Reserve duty), spouses, and certain dependents. It limits the interest rates that may be charged on many types of consumer loans to no more than 36% and provides other important protections.

MLA Style creates rules for students to follow when writing and formatting papers. Using MLA Style not only helps your instructors read and understand your work, but the act of creating citations and citing sources helps prevent plagiarism.

The MLA does not cover military retirees, unless they are also dependents of a borrower who is eligible for protections under the MLA. Same-sex spouses and certain unremarried former spouses may also be covered under MLA. *Military dependents are specifically defined under MLA as follows: Spouses.

The Military Lending Act1 (MLA), enacted in 2006 and implemented by the Department of Defense (DoD), protects active duty members of the military, their spouses, and their dependents from certain lending practices. restricts loan rollovers, renewals, and refinanc- ings by some types of creditors.