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Home >> Military Issues
CU Refuses to Honor SSCRA Stipulations
I'm currently an active duty soldier deployed for the next year. I have a situation. I was told that with the SCRA, I would be able to lower my car loan interest. The bank I finainced through said otherwise. Here is what day said.
"XXXXCredit Union has been informed, that you have submitted a document referencing orders for service in the Armed Forces.
XXXXUnion's policy during this military crisis generally goes beyond the requirements of the law in respect to the Service Members Relief Act formerly as Soldiers' and Sailors' Relief Act of 1940.
XXXXCredit Union appreciates your devotion and sacrifices made to our country, unfortunately deployment of a Temporary Change of Station (TCS) does not qualify this loan for a reduced payment and or interest rate."
Could it be because of the bank's policy or is this not true?
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We are sorry to hear that while serving your country you are having these problems. Unfortunately, many financial institutions do not devote the time to compliance with this law, because they just don't have a lot of exposure to it. One person trains another and before you know it, there is more misinformation than good information.
We trust that your debt exceeds the 6% rate you are granted under the law and that your debt was incurred prior to your period of military service. Those two conditions must be met.
Please write back to them and indicate the following, assuming this is true and correct for your situation:
The Servicemembers Civil Relief Act (enacted Dec. 19, 2003) amended the Soldiers and Sailors Civil Relief Act. It is also found under 50 USC 501. Under each of these however, relief of my pre-service debt is granted by virtue of this law. It has nothing to do with a duty assignment and everything to do with my loan being obtained before I entered the service and the fact that the rate exceeds 6% interest.
Please bear in mind this reduced interest rate is a matter of law and is meant to offset the lower income of a servicemember as opposed to many of their civilian counterparts. It doesn't matter where my duty station is. It is about income, and while some protections are contingent upon a temporary duty assignment, such as lease protections, the interest rate protection is not one of them.
In accordance with Sec. 207 of the Act (50 App. U.S.C. 527), I have sent you a written request with a copy of my orders which show when I was placed on active duty. In fact I have up until 180 days after my period of military service to make this request, but I am doing it now, for the second time.
Please re-amortize my loan to a 6% simple interest rate effective my date of active duty which was _______. Please then advise me of the interest that has been rebated already, and my current payment amount, based on this new rate and new amortization.
I look forward to hearing from you.
We recommend that you reply to the person you have corresponded with and the president of the credit union. We hope they will review the law and see that your duty station is moot on this point, and it is all about your period of military service.
We also hope you will write back to us and let us know the outcome. Thank you for your service.
Published on BankingQuestions.com 3/02/10
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