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Servicemembers Civil Relief Act
Your Rights and Responsibilities
Andrews Federal Credit Union was founded in 1948 to serve the civilian personnel of Andrews Air Force Base. Andrews Federal has grown to serve the District of Columbia, Andrews Air Force Base, McGuire Air Force Base (NJ), military installations in central Germany, Belgium, and the Netherlands, as well as many select employee groups in Maryland and New Jersey. Our active duty members rely on us to keep them abreast of legislation that may impact their Andrews Federal accounts while they are away serving our country. An example of this legislation is the Servicemembers Civil Relief Act (SCRA) which provides certain protections in the event that an individual enters active duty service.
What is SCRA?
The SCRA was signed into law in 2003. The SCRA was enacted to ease the economic and legal burdens of military personnel called to active duty status. It limits certain financial obligations while the service member is on active duty.
Who benefits from the provisions of the SCRA?
Active duty personnel appointed, enlisted, and inducted into the regular branches of U.S. military service (i.e., Army, Air Force, Navy, Marines and Coast Guard), as well as personnel mobilized in National Guard and Reserve units are covered under the SCRA.
How does the SCRA affect interest rates on loans?
The SCRA provides for an annual interest rate cap of six percent on debt incurred prior to active duty. The interest rate cap is effective on the date active duty service begins and will continue until the service member enters active duty status are not covered by the SCRA and are not eligible for the six percent cap.
What are other provisions of the SCRA?
Other provisions of the SCRA include protection from repossessions and foreclosures, termination of leases, delay of garnishments and attachment proceedings as well as other legal actions. For further guidance on what is covered under the SCRA, please contact a local legal office.
Who else is protected by the SCRA?
In addition to active duty service members, there are other individuals protected under the SCRA:
- Dependents. Dependents are defined as the service member's spouse, child or other individual for whom the service member provides the majority of support for 180 days immediately preceding the application for SCRA relief.
- Guarantors and Cosigners. If the service member has a loan with a cosigner, guarantor or endorser, the creditor cannot collect from the guarantors instead of lowering the rate to six percent.
What happens at discharge?
Once the service member is discharged or otherwise leaves active duty, the creditor may raise the interest rate back to the original contractual level. Service members may apply to the court for an extension.
How is a rate cap requested on an Andrews Federal loan?
Andrews Federal must be notified in writing of a request for a rate cap. A copy of military orders detailing activation to active duty should be provided along with evidence of the difference between military and civilian pay.
This information should be mailed to:
Andrews Federal Credit Union
P.O. Box 4000
Clinton, MD 20735
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