Did you know that National Guard and Reserve service members are eligible for reduced interest rates when they’re on active duty? Unfortunately, they’re not always getting what they’re entitled to.
According to the Consumer Financial Protection Bureau, Reserve and National Guard members called to active duty are paying an extra $9 million in interest every year because they are not always receiving the benefit of their right to rate reductions under the Servicemembers Civil Relief Act. The Servicemembers Civil Relief Act (SCRA), according to the CFPB, “gives servicemembers on active duty the right to request interest rate reductions on outstanding loans during the time they are activated and for an additional year in the case of mortgages.” Despite these money-saving rights, only a small percentage of activated Guard and Reserve members are receiving the interest rate reductions they’re owed. These interest rate reductions are especially important in times of high interest rates, like now.
Congress passed the Civil Relief Act to make it less of a financial burden for Reservists and Guard members to be activated. However, lenders could do a much better job of simplifying the process for eligible servicemembers.
For instance, if a servicemember requests an interest rate reduction for one account, the lender could also provide reductions for all other accounts the servicemember might hold at that institution. They could also use online applications, no mail-in or faxed ones.
National Guard members and Reservists who are activated should not have to deal with a massive amount of red tape to get the financial benefits to which they’re entitled.
If you have an issue you would like to discuss with Skinner Law Firm, give us a call at 304-725-7029 or submit your case details for a free consultation.