Did you know there’s a federal law that aims to makes it easier for servicemembers to focus on their job without worrying about their finances? The Servicemembers Civil Relief Act (SCRA), enforced by the U.S. Department of Justice, was created to give servicemembers more peace of mind by easing financial and legal burdens, including reducing, postponing or suspending certain civilian obligations. 

If you’re currently on active duty or are preparing to serve, it’s important to be aware of and understand the protections available to support you and your family, including how to access your benefits.

Who is eligible for SCRA benefits?

The SCRA covers all active duty service members, reservists and members of the National Guard while on active duty.¹ Eligibility for benefits begins on the first day of active duty and usually ends within 90 days of discharge. Some protections may also apply to spouses and dependents of the service member. Your base Legal Assistance Office can help you determine eligibility.

Tina Severson, Senior Branch Manager, is the spouse of a servicemember, and is also the Communications co-lead for SALUTE, a Commerce Bank employee resource group focused on veterans. She knows firsthand how valuable SCRA benefits can be.

“Servicemembers can find themselves in unique situations, like moving away from a home that they own,” she explains.

“Knowing about and using their benefits instead of suffering through the stresses that can happen when called to active duty can make life easier for them.”

What benefits and protections are covered under the SCRA?

The SCRA offers many protections to help ease financial, legal and tax obligations for service members and their families. Here’s a look at some of the most-used SCRA benefits.²

• Interest rates on loans incurred prior to service are capped at 6%. This includes credit cards and mortgages, as well as car, student and other loans. The 6% maximum interest rate applies for the entire time you’re serving on active duty.
• “Capping interest rates and fees on debt beginning as early as the first day of active duty allows servicemembers peace of mind to devote their energy to the defense needs of the nation,” explains Angela Cunningham, senior research specialist and consumer ACH dispute resolution, Commerce Bank.
• Protection from evictions, foreclosure and property repossession. If you purchased a home before starting service, you’re protected from foreclosure during the time you serve, plus one additional year. The law also protects you from an eviction without a court order. If you acquired personal property before you began service and paid a deposit or at least one installment payment, you’re protected from repossession without a court order.
• Lease and contract termination without penalty. This benefit lets you cancel a housing rental contract or car lease without penalty. You can also cancel other types of service contracts like cell phones, cable and internet if you relocate to a place that doesn’t offer coverage under your current provider.
• Deferment of tax filing and payment without penalty. In addition, military spouses can choose between their home of record and the service member’s current state of legal residence for tax purposes. Consult your tax professional for guidance.

While the SCRA covers many issues, it doesn’t apply to new debt incurred during service, criminal court proceedings, or failure to file or pay income taxes. You can learn more about SCRA benefits and details on the U.S. Department of Justice Servicemembers resources page.

How do you access SCRA benefits?

To take advantage of a specific SCRA benefit, you must make a written request to the lender or service provider and include a copy of your active duty orders. You can also contact your local base Legal Assistance Office for help determining eligibility and accessing your benefits. Taking advantage of your eligible benefits, including delaying payments, won’t negatively impact your credit history.

“Servicemembers who are Commerce Bank customers should inform us as soon as possible when they receive notice of active duty to ensure benefits are applied in a timely way,” says Cunningham. She adds that it’s as easy calling 1-800-292-1601, extension 16324, Monday through Friday, 8:00 a.m. – 4:00 p.m. Central time or sending an email to SCRA@commercebank.com.

Resources for servicemembers and their families

Severson says there are many resources on the bases that can lead you in the right direction. “Most servicemembers can start with their chain of command to find out what's available,” she adds.
Familiarizing yourself with the SCRA and taking advantage of the financial protections available to you and your family can help reduce the challenges of serving and make it easier for you to devote your energy to your mission. Commerce Bank is here to help make the process of accessing your benefits as easy as possible.

Disclosures:

1. “The Servicemembers Civil Relief Act – SCRA,” Military.com, Feb. 27, 2023,
   https://www.military.com/benefits/military-legal-matters/servicemembers-civil-relief-act-overview.html
2. “The Servicemembers Civil Relief Act (SCRA),” Consumer Financial Protection Bureau,
   https://www.consumerfinance.gov/consumer-tools/educator-tools/servicemembers/the-servicemembers-civil-relief-act-scra/ 

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Also see:

• Commerce’s newest employee resource group focuses on veterans
• Simple ways to save money