Few bankers and moneylenders understand howServicemembers Civil Relief Act protections apply to the National Guard and reservists versus regular military personnel.
If you’re worried about how the law applies to these groups, you’re smart to be concerned. A misstep in this area can be expensive.
Who is entitled to automatic SCRA protections? Active-duty personnel in the Army, Marines, Navy, Air Force, Coast Guard and commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration (NOAA) as well as reservists called to active duty. While there are certainly differences between the National Guard and reservists and their duties and functions, your principal concern is centered around how they are called to duty and by whom.
Protections forNational Guard and Reservists
Both the governor and the president have the power to call up the National Guard. But federal SCRA benefits apply only when the president issues the call-up. Further, the call-up must be under 10 USC 12406and exceed 30 days for these protections to kick in.
Members of the reserves and National Guard include volunteers, those activated involuntarily and inductees. But if they are not on active duty, the federal SCRA does not apply.
However,certain states have written their own versions of the SCRAthat give add additional protections for reservists and National Guard members by extending protections to servicemembers called up by the governor.
Thus, if you do business in a state with such a law, it doesn’t matter who called the servicemember to active duty — SCRA protections apply.
Know the Nuances
A common mistake is to assume protections don’t kick in until a National Guard member or reservist reports for duty. This is the case with regular, active-duty personnel. However, protections for National Guard members and reservists start the day they receive their orders.
All these slight distinctions can be confusing. Although it’s easy to make a mistake, the Justice Department is not particularly forgiving in these instances. Thus, to be safe, it’s best to makemilitary status verificationa standard step in the process of taking any action against a debtor. Securing an affidavit of military service can further cement the details of your investigation.
The SCRA can be murky, so it’s best to move cautiously when dealing with servicemembers.
Congress created the SCRA to relieve active-duty personnel of worry over debts, foreclosure and similar actions while they are serving our country. But SCRA protections are not always absolute and they are easy to misinterpret. That’s why lenders should become familiar with the SCRA and all of its provisions and exceptions.
For help identifying active-duty servicemembers,log in to your account at the Servicemembers Civil Relief Act Centralized Verification Service. If you haven’t registered, you can register to obtain your military status verification here. We provide documentation to you within 24 hours. Getting answers is quick and easy, and keeps your institution compliant.
Attorney Roy Kaufmann serves as the Director of the Servicemembers Civil Relief Act Centralized Verification Service, located in Washington, D.C. As a recognized authority on the Servicemembers Civil Relief Act, Mr. Kaufmann has published hundreds of articles and hosted many webinars. His teachings help law firms and businesses to remain compliant with the SCRA rules and regulations so as to avoid costly fines.
FAQs
The Servicemembers Civil Relief Act provides financial and legal protections for active-duty service members, including National Guard and reserve members, and their families.
Do reservists qualify for SCRA? ›
Active duty members are covered by the SCRA. Reservists are covered while on annual training, but are not covered while on inactive duty training. National Guard members are covered only if in active federal service (Title 10 Status).
What does the SCRA Act do? ›
The Servicemembers' Civil Relief Act (SCRA) postpones or suspends certain civil obligations to enable service members to devote their full attention to duty and relieve stress on their families. The SCRA covers all active duty service members, reservists, and members of the National Guard while on active duty.
Are SCRA protections automatic? ›
SCRA offers a variety of provisions to help active duty personnel meet their legal and financial obligations. But relief under the SCRA is not always automatic. You must affirmatively invoke or request relief.
Who is not eligible for SCRA benefits? ›
Servicemembers' dependents may also seek safeguards under the SCRA in limited circ*mstances, such as evictions or joint leases. 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.
Am I protected Veteran if I am in the National Guard? ›
Are the Reserves and National Guard Veterans? National Guard and Reserve members will have veterans status and be eligible for VA benefits if they: Deployed on federal active duty for at least 180 days, and. Received a discharge that was higher than dishonorable or bad conduct, OR.
How do you get approved for SCRA? ›
For your convenience, you can submit your request using the SCRA Benefits Request Form. You'll need to include the following information in the form or in a separate written request: Initial Active Duty start date. Date Active Duty orders were issued.
What is the 6 percent rule for SCRA? ›
The Six Percent Rule: An Army Reserve servicemember has the ability to reduce consumer debt and mortgage interest rates to 6% under certain circ*mstances. This applies only to debts and mortgages that were entered into prior to entry on active duty.
What are the requirements for SCRA notice? ›
What are SCRA notice requirements? SCRA notice requirements include the military orders that stipulate the service duration of the military personnel, written notice of the SCRA benefit request, and routine checking of SCRA protection eligibility status. The benefit granted depends on the nature of the business.
Do you get money back from SCRA? ›
Servicemembers Get Money Back
Additionally, the SCRA requires that any request for a lower interest rate be followed by some form of refund. So all the extra money that the servicemember paid as his or her interest rate that grew over the years? It must be given back upon the request for a backdated interest rate.
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.
How does SCRA work for credit cards? ›
The SCRA can help service members who come into the military with high-interest debt. It limits interest rates on debt to 6%, including debt held jointly with a military spouse. The interest rate reduction covers the time when a service member first entered active-duty status to the day they are no longer active.
Does the National Guard qualify for SCRA? ›
National Guard servicemembers on state active duty are eligible for the Servicemembers' Civil Relief Act if they are serving under TITLE 32 under a call to active service by the President or the Secretary of Defense for more than 30 days.
What are SCRA violations? ›
The types of violations courts can hold lenders liable for include: Repossessions. Foreclosures. Evictions. Excessive interest charges.
What documents are needed for SCRA? ›
Frequently asked questions for those applying for SCRA benefits
- A copy of your official military orders.
- A letter from your commanding officer on military letterhead.
- Any form of official notification of military service.
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.
What federal law protects National Guard members? ›
USERRA is the federal law that establishes rights and responsibilities for members of the Reserve and National Guard and their civilian employers. USERRA affects employment, reemployment, employment benefits and retention in employment, when employees serve or have served in the uniformed services.
Does National Guard fall under USERRA? ›
What types of military service are covered by USERRA? USERRA's definition of “service in the uniformed services” covers all categories of military training and service, most often understood as applying to National Guard and reserve military personnel.
Are all National Guard members considered veterans? ›
National Guard and Reserve members are not considered veterans unless they were called up to active duty by the President of the United States and served the appropriate length of time to receive an award for a benefit or they honorably completed the length of obligation for which they were called or they served as ...
