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Written by Cyndie Martini
on December 07, 2018

The Servicemembers Civil Relief Act, or SCRA, is a program designed to ensure those serving in active duty are able to focus on their duties without stressing about any debts they or their dependents may have incurred prior to their service. To that end, the act mandates that active duty service members can have their interest rates reduced on things like loans and credit cards. The act also protects service members against repossession and foreclosure while they are serving

Recently, some changes have been made to the SCRA that make receiving those benefits easier, and can streamline the process of implementing those interest rate changes for banks and credit unions.

Putting it on Paper

In the past, when a service member wished to take advantage of the financial incentives and protections offered by the SCRA, they had to provide both a written notice and a copy of their military orders. This had to be done within 180 days of being released from service if they hoped to make use of the benefit, which not only changes the interest rate going forward but also often results in refunds on both the prior interest rate and some service charges.

Getting those papers to your bank or credit union was often a hassle, not to mention could be insecure, since you needed to include your account number, the date your active duty service began, and a request for your SCRA rate reduction in addition to a copy of your active duty orders. Not to mention, many service members would end up trying to do all this while also making all the other arrangements necessary when going into active duty, especially when that requires a move.

Going Digital

To help streamline this process, a new tool has been developed by the Defense Manpower Data Center (DMDC). The DMDC now maintains an SCRA database where credit unions and banks can independently verify the active duty status of a service member.

 

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