I have searched unsuccessfully for an answer to a running debate we are having at our bank. "Ms. Smith" works for the National Guard. She has been called to active duty and is, as we speak, winging her way to the Mid-East. Her sister, who has charge of her children, brought in the orders for active duty. We have a loan officer that said, "No, it only applies to weekend warriors. Since your sister already works for the Guard, and receives her paycheck from the government, she doesn't qualify." I don't agree. Anyone else have something like this scenario?

Bottom line, your loan officer is wrong. SSCRA does apply to this situation. While working for the National Guard, your customer is not on federal active duty orders. Now that she has been called to active duty on federal orders, this triggers SSCRA protections. However, this does not mean there is an automatic interest rate reduction. Remember, you can attempt to rebut the interest rate reduction if you can show that the call to active duty will not materially affect her financial situation. Since her pay will probably not change at all (actually may increase if there is hazardous duty pay involved), you might could make a case here. But be very careful and consider all the ramifications before you take this approach. You do have some risk in taking this approach, even if you successfully avoid the interest rate reduction. First, the burden of proof is on you, the financial institution, to prove there is no material impact to her financial situation. Second, there is the reputation risk issue - you probably don't want to be seen as a bank that sticks it to soldiers called up to defend our country in war.

See if any of the specifics here help.

You said you have a copy of the orders for active duty. This is an indication that while in the Guard, the customer wasn't full time or activated. I am leaning toward protection under the SSCRA as applicable. But see if the link helps.

The Act covers virtually any civil obligation or other liability of the service member incurred prior to entry upon active duty. I would say if she has sufficient proof such as a copy of the individual's duty order verifying the date of entry on active duty... you should be all set.

If working full time for the National Guard is already considered "active duty" then you might have another issue.

Elena,
The SSCRA applies to ALL service members, whether or not they are in the military or are called to active duty. In addition, according to the SSCRA, the term "military service" "shall signify Federal service on active duty with any branch of service heretofore referred to or mentioned as well as training or education under the supervision of the United States preliminary to induction into the military service." Some of the confusion lies, in part, because although all service members receive some protections under the SSCRA, additional protections are available to reserve components called to active duty. The portions of the SSCRA that apply to active duty military who are not “called up” guarantee service members the right to vote in the state of their home of record and protect them from paying taxes in two different states.

You did not state in your post whether the woman was serving on federal or state duty. That could make a difference. National Guard members serving on state active duty (non-federal) status are not protected by the SSCRA. This is because the military has determined that SSCRA coverage is a not a benefit for National Guard members, but legal protection. National Guard members performing state active duty must look to state statutes that parallel the SSCRA for relief. That being said, the person you mentioned may be eligible if she was called to active duty for the Federal Government, even if she was previously ineligible as a State National Guard member.

One of the most significant provisions under the act applies to all debts incurred prior to the commencement of active duty. The question I see is two-fold – Is she a full time State NG member called to Federal service or is she part time NG with a civilian job who is now materially affected by the call-up? If she is a State NG person newly eligible for SSCRA protections due to her call-up, that might make a difference. She might be eligible if her debts were incurred while she was in the Guard but ineligible for SSCRA. I don't know if this would be construed as being "prior to active duty" or not. You might want to contact the closest JAG office and ask them about her status. A JAG lawyer should be able to advise you.
Leslie

John,
I was refering to her duty prior to being called up. Sometimes National Guard troops that have been on state duty are called up for federal duty. Obviously she is NOW on federal duty - sorry I didn't make myself clear on that.
Leslie