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Interest rates for servicemembers
Answer by Mary Beth Guard, BOL Guru
Guru BIOS
Question: In a recent Servicemembers Civil Relief Act seminar, the presenter repeatedly stated that this Act
involved all service personnel whether “ordered to service” or those that enlisted. In the original spirit of the law, it was designed to protect those individuals that
were “forced into military service – drafted” and had to leave better paying jobs in the civilian world for worse wages in the military. I was one of those lucky
individuals.
However, those that enlist are very much aware of what the wages (monetary) will be in the military, what the expenses are while in the military, and what the
expenses will continue to be from before military service. Section 106 under Article 1 clearly states that those persons “…ordered to report…” are entitled to
benefits. The interpretation given was that an enlistee can now take out a loan before entering the service and become basically collection proof while in the service,
and I also must reduce the interest rate while the individual is hiding behind this act.
Was this presenter extremely liberal in her interpretation of the spirit of the law, or am I just as conservative because of my experiences?
Answer: This interpretation is borne out by over 60 years of usage in the United States and interpretation by the courts. In the past, many military persons
were hesitant to “take advantage” of some of these provisions, but they exist in times of peace and in times of war and apply equally to those who voluntarily
enter the service and those involuntarily called to action.
The original version appeared in the September/October 2004 edition of the Oklahoma Bankers Association Compliance Informer.
First published on BankersOnline.com 4/25/05
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