The Servicemembers Civil Relief Act (SCRA) has been amended to make it easier to terminate residential and automobile leases without penalty. Servicemembers, veterans, and their families should also be aware to do their due diligence before waiving their SCRA rights. Failure to do so could have serious consequences!
What is SCRA
The SCRA provides additional protections for service members if a law or financial transaction adversely affects their rights while in military or uniform.
The SCRA applies to service members who:
- active duty members of the Army, Marine Corps, Navy, Air Force, and Coast Guard;
- Members of the Reserve Forces while on active duty;
- National Guard members are mobilized under federal order for more than 30 consecutive days; or
- Active duty officer of the Public Health Service or the National Oceanic and Atmospheric Administration.
Anyone with a valid power of attorney from the service member can exercise SCRA rights. Some SCRA protections also apply to dependents.
SCRA Amended to Allow Electronic Termination of Leases
Today, many businesses offer consumers the option to conduct transactions and communications electronically, whether leasing a home or purchasing a car. However, some lessors and car dealers refuse to provide service members with the facility to terminate their lease electronically. Instead, service members must provide written notice by personal delivery, private courier, or regular mail, return receipt requested.
This year, the SCRA was amended to allow eligible individuals to terminate these leases electronically by sending a notice of termination along with a copy of the order – or a letter from the commander via email or a communication portal designated by the lender or agent.
Always consult with a qualified attorney before waiving your SCRA rights
Military personnel are sometimes asked or pressured to waive their SCRA rights in order to rent. Recently, a military member reported that when she went through a permanent change of duty, she searched for housing online, came to town to pick up her keys at the rental office, and was given a SCRA waiver form. She reported that she felt pressured to sign the waiver because she had just moved to the area and had no other place to live. According to the U.S. Department of Defense, four hundred thousand military personnel go through a permanent change of duty each year.
It is important to understand the impact that waiving your SCRA rights can have on your finances and ability to fulfill your military duties. Waiving your rights can allow a landlord or creditor to obtain a quick default judgment, which a military member who is deployed or transferred out of the area for official reasons cannot defend. Military members (including all officers) are also subject to routine national security checks, which include a detailed review of their credit history, and these judgments may negatively affect your credit report, which can have long-term financial effects and make it difficult for you to get approved or promoted.
Before signing a SCRA waiver, be sure to read it carefully and speak with a military legal aid attorney or private attorney for guidance.
If you believe your SCRA rights have been violated, you have options:
It is illegal to retaliate against you for asserting your SCRA rights. If you believe your rights have been violated, you can:
- Seek help from your local military legal aid office
- Contact your state’s attorney general
- File a complaint with the Department of Justice’s Office for Civil Rights,
- If you have a problem with a financial product or service, file a complaint with the CFPB.
What the CFPB is doing to help military members understand their rights under the SCRA
We have developed several resources to help you better understand the full range of financial and legal protections available to you under the SCRA:
- SCRA Page – A comprehensive overview of the Servicemembers Civil Relief Act.
- Ask the CFPB Questions About the SCRA – Clear, unbiased answers to common SCRA and other service member-related financial questions, including how to place an Active Duty Alert on your credit report during deployment.
- Money Mismanagement Program – Provides education and training on key financial topics, including the SCRA, to future and current military members.
- Focus on the Military Community Companion Guide – the “go-to” resource for those who help military members, veterans, and their families achieve their financial goals.
In addition, our Office of Enforcement has a single point of contact to provide training and technical guidance on certain aspects of federal consumer financial laws to military legal personnel and personal financial preparedness managers and staff.
