If I read this right Citi says the lender paid the difference in the rate above 6% and the 12.99% contracted for. They should hope I don't sit on the jury because refunding or making up the difference isn't the same as not charging in my book.
From th SCRA - "An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicememberís spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent per year
during the period of military service.
Interesting point on the amortization. And the way they are handling the interest is incorrect, IMHO, in an effort to keep the principal high. How many loans are they doing this on, and what can this cost them? I suspect more than they're making now on these.