What does the SCRA cover?
The Service Civil Relief Act (SCRA), previously called the Soldiers' and Sailors' Civil Relief Act (SSCRA), was released in 2003 to provide military personnel with legal protection. The various perks offered under this law are applicable to active service members, members of the National Guard, and reservists up until 30 to 90 days after their retirement.
The SCRA extends many benefits to servicemembers in different areas, including security deposits, rental agreements, installment contracts, mortgage and credit card interest rates, income tax, civil judicial proceedings, property eviction, automobile repossession, health insurance, life insurance, mortgage foreclosures, income tax payments, and automobile leases.
What does SCRA mean in law?
The sole purpose of the SCRA is to reduce civil obligations for service members so that they can stay focused on their duty. This federal law adequately serves its purpose by providing military personnel with ample benefits and protections, as mentioned earlier.
While all active military members can take advantage of this act, there are many instances where military status verification is required. This can be obtained from the SCRA Centralized Verification Service (SCRACVS).
Protections provided under the Military Lending Act
The Military Lending Act (MLA) was introduced by the Department of Defense in 2006 to protect military personnel and their families from illegal lending practices. The act restricts covered credit transactions to an annual rate of 36%, which is known as the Military Annual Percentage Rate (MAPR). The following areas are covered under the MLA: Debt cancellation fee, credit insurance fee, finance charges, application fee, and any fee incurred by selling ancillary products connected to the credit transaction.
The MLA prohibits the following to protect those that come under its umbrella: Mandatory arbitration, using an allotment to attain the loan, stringent contract provisions, implementing a penalty for early payments, acquiring a loan by utilizing a post-dated cheque, using car titles and bank accounts to obtain particular loans and refinancing other loans.
MLA's perks are valid only for active members of the military and their families who have been enrolled in the Defense Enrollment Eligibility Reporting System (DEERS).
What is the difference between SCRA and MLA?
Both of these acts were introduced to protect the fundamental rights of military personnel, and they are both applicable to active members only. The SCRA has existed in some shape or form since 1940, whereas the MLA is a lot more recent. Let's take a look at some of the distinct differences between the two acts:
- Coverage: All seven branches of the military are beneficiaries of the various benefits and protections provided by the SCRA. These include the Army, Navy, Marines, Air Force, Coast Guard, Public Health Service, and the National Oceanic and Atmospheric Administration. Out of these, only the first five are covered by the MLA.
- Obligations: The SCRA protects obligations such as debts, life insurance, mortgages, and all those mentioned earlier. The only catch is that the act applies only if these obligations were incurred before the military personal started their active service. However, there is no such requirement in the MLA.
The obligations not covered in the SCRA are all of those that have entered into after the start of military service. In the MLA, mortgages secured by real estate and mobile home loans are not included.
- Caps: The SCRA caps interest rates at 6%, whereas the MLA imposes a cap of 36% (MAPR) on various fees.
The SCRA and MLA ensure that military personnel can adequately handle their duties without worrying about financial and legal difficulties. The two acts fulfill the same primary purpose, with a few differences in implementation.