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#2223491 - 10/10/19 05:19 AM SCRA - Annual "Renewal" Credit Card Fee
pskadot671 Offline
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Hoping anyone can guide me in the right direction.

The regulation says:

"The federal SCRA allows service members to cap the interest rates on most of their preexisting loans or obligations at 6% per year while on active duty. The 6% interest rate cap applies to mortgages, credit cards, car loans, other installment loans, and some student loans. "Interest" includes fees and other charges."

In regards to the following ""Interest" includes fees and other charges." can anyone help provide some insights to this particular section.

e.g. The Bank reduced the interest rate on existing credit card when the Servicemember request or submits a letter. During the course of the servicemember, the annual fee is accessed and including several other fees. Does these fees have an effect on the 6% interest rate as well

The questions is should the fees be accesssed including the annual renewal fee. Each year a renewal fee is accessed for all card holders.

Can anyone provide where in the regulation the Bank can not access these fees after all other fees have been waived.

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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#2223492 - 10/10/19 11:37 AM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
rlcarey Online
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Galveston, TX
(d) DEFINITIONS.—In this section:


(1) INTEREST.—The term ‘interest’ includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2223579 - 10/10/19 10:01 PM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
pskadot671 Offline
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Joined: Jan 2013
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Thank you!!!

I have read the reg which I including in my message. Thank you for providing that particular section. I guess that is what I get for reiterating the section of the regulation, thus free service. Yes, I asked "Can anyone provide where in the regulation the Bank can not access these fees after all other fees have been waived."


Hopefully someone can answer my question or provide their thoughts.


In regards to the following ""Interest" includes fees and other charges." can anyone help provide some insights to this particular section.

e.g. The Bank reduced the interest rate on existing credit card when the Servicemember request or submits a letter. During the course of the servicemember, the annual fee is accessed and including several other fees. Does these fees have an effect on the 6% interest rate as well

The questions is should the fees be assessed including the annual renewal fee. Each year a renewal fee is accessed for all card holders.

1)Can an annual fee "Renewal Fee" be assessed each year?
2)Can the Bank continue to assess the renewal fee and other applicable fees e.g. Merchandise fee, over the balance fee...etc,
3) Does these fee have any impact on the interest rate "6%" when these fees are assessed?

Thank you again for all your help

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#2223582 - 10/10/19 11:34 PM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
rlcarey Online
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Based on my citation the answers are:

1) No
2) No
3) Yes - they are considered within the definition of interest under the SCRA. If you have moved the interest rate to 6% you cannot assess any other fees.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2223583 - 10/11/19 01:11 AM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
pskadot671 Offline
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Joined: Jan 2013
Posts: 27
Thank you.

Apparently, management is under the impression that it should not cause it was not "pre-existing".

With your assistance and guidance, I really appreciate it.

Now, I'll need to ensure that there is a citation within the regulation that says such or interprets such as it is very vague
Hopefully, I find that section and in addition, I'll provide this section as well..."

d) DEFINITIONS.—In this section:


(1) INTEREST.—The term ‘interest’ includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.

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#2223586 - 10/11/19 11:40 AM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
rlcarey Online
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rlcarey
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There are no implementing regulations for the SCRA.

You can look at some the examination material, such as from the FDIC:

7. Determine how the institution calculates the reduced interest rate. Does the institution include all service and renewal charges, as well as other fees and charges, with the exception of charges for bona fide insurance?

https://www.fdic.gov/regulations/compliance/manual/5/v-11.1.pdf

See page 4
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#2223854 - 10/16/19 09:27 PM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
Andy_Z Offline
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A question I have is whether this credit card is still being used, or paying out? If charges have stopped, the balance which was preexisting debt is protected. New charges are not preexisting debt and can be subject to the current terms.
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#2223864 - 10/17/19 06:30 AM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
pskadot671 Offline
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Joined: Jan 2013
Posts: 27
The card is existing and continues to be used. Each year there is an annual fee charged (other banks probably call it renewal fee). Other fees are assessed only when applicable should the card be used in certain instances.

The concerns pertains to these fees and whether it has an effect on the interest rate of 6% during the course of the service member active duty.

There is not any information in regards to such or maybe i'm just not understanding the reg.

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#2224286 - 10/23/19 08:27 PM Re: SCRA - Annual "Renewal" Credit Card Fee pskadot671
Andy_Z Offline
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The 6% applies to per-service balances, not the current charges. If your system breaks these into parts you should be OK. If this fee is based in part on the pre-service balance, I'd say it's out.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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