The Servicemembers Civil Relief Act (SCRA) of 2003
Don’t Leave Home Without It!

by Phil Dyer, MOAA

Unfortunately, there is significant misinformation about how this law is actually applied.  Most protections are not automatic, but must be requested, often in writing.  Some of the key provisions are:

• The 6 Percent Rule–This mandates a 6-percent cap on loans and mortgages incurred prior to entering active duty (through either enlistment or mobilization) if military service materially affects the service member’s ability to repay the debt.  This often occurs when National Guard/ Reserve members are called to active duty and take a significant pay cut from their civilian sector employment.  If your civilian-sector employer provides pay differential in support of activated Guard/Reserve employees, it is unlikely this rule will apply.  Requests must be made to the lender in writing.
  
  
• Termination of Leases–This provision now allows for termination of leases on homes, apartments and automobiles leased by the service member and their dependents, even if the lease was entered into after coming into active duty.  PCS orders, or a deployment of 90 days or more, qualify the service member to break a residential real estate lease.  To break an auto lease you must receive overseas PCS orders or be deployed for 180 days or more.

Visit DefenseLink.mil/ra/mobil/pdf/scra_info-paper.pdf to learn more about SCRA, or talk to your installation legal specialist.

A Guaranteed 10 Percent Back
If you are currently serving as an active duty service member deployed to a combat zone, qualified hazardous duty zone or certain contingency operations, you may qualify for the Special Deposit Program.  Sponsored by the DOD, it guarantees 10 percent on funds deposited while deployed.  This rate is three to 10 times higher than that offered by most banks and credit unions; it’s twice current 1-year CD yields.

Key program points include:

• Qualifying service members can deposit up to $10,000 into the account during a single deployment via military pay allotment.
• Allotments must made be in $5 increments.
• Deposited money earns a guaranteed 10 percent, compounded quarterly.
• The allotment can be stopped at any time.
• The money stays in the account until the deployment ends (although hardship withdrawal requests can be made).
• If a service member is already deployed, an agent (spouse, parent or other family member) with a special power of attorney can start the allotment.