Introduction
The Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) recently posted a joint letter directed to financial institutions, reminding them to honor the Servicemembers Civil Relief Act (SCRA). In particular, the DOJ and CFPB highlighted the importance of honoring the interest rate limit for service members, recently discharged veterans, and their spouses.
A 2022 Analysis revealed that less than ten percent of eligible automobile loans and six percent of personal loans honored this SCRA protection, resulting in a $10 million loss in potential savings.
Justice Department’s Civil Rights Division Assistant Attorney General Kristen Clarke highlighted how service members make a great sacrifice for the country. In turn, financial institutions should honor their SCRA rights as mandated by the law.
CFPB Director Rohit Chopra said in a statement that high interest rates have burdened many eligible military families and that financial institutions shouldn’t make it hard for service members to manage their budgets.
