Financial Protections For Servicemembers

The Federal Reserve, along with the other agencies, is working hard to enforce an array of strengthened regulations that protect mortgage borrowers, credit card holders, and other consumers of financial services. The people in this room should be aware, in particular, of the special rights and protections provided to military personnel by the Servicemembers Civil Relief Act. The law's purpose is to allow servicemembers to perform their duties without worry of foreclosure, eviction, and civil prosecution--under most circumstances. It caps interest rates for debts incurred before a servicemember begins active duty, it prevents creditors from foreclosing on a home or repossessing a car without a court order, it gives servicemembers the option to terminate residential property and motor vehicle leases, it stays civil proceedings while servicemembers are on active duty, and it entitles servicemembers to reinstatement of health insurance that was in effect before their military service began. Additionally, Department of Defense rules regulate the terms of certain kinds of high-cost loans to servicemembers and their families, such as payday loans, tax refund anticipation loans, and motor vehicle title loans.