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ABA: The American Bankers Association
Compliance News

Changes to SCRA Proof of Military Service

Recently, there have been changes to SCRA "Proof of Military Service" requirements that should simplify the steps bankers take to verify SCRA eligibility. Section 600 of the 2019 John S. McCain National Defense Authorization Act modifies the ways in which military members can prove their military status for purposes of the 6% ceiling on pre-service debts. Previously, the requirement was to provide a copy of their military orders. The change provides greater flexibility and allows alternative methods to prove eligibility, including a letter from the person's commanding officer. Second, creditors are also granted a safe harbor by confirming eligibility for SCRA coverage using the Defense Manpower Data Center database to confirm active duty status. Currently, these provisions only apply to the 6% interest rate cap in the SCRA, but it's a step that will make it easier to confirm that an individual is covered.