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Consumer advisory: Know your rights under the Servicemembers Civil Relief Act (SCRA)

The Servicemembers Civil Relief Act (SCRA) has been amended to make it easier to terminate residential housing and automobile leases without penalty. Servicemembers, veterans, and their families should also be aware to do the necessary due diligence before waiving their SCRA rights. Not doing so may result in dire consequences!

What is the SCRA

The SCRA provides extra protections for servicemembers in the event that legal or financial transactions adversely affect their rights during military or uniformed service.

The SCRA applies to the following servicemembers:

  • Active duty members of the Army, Marine Corps, Navy, Air Force, and Coast Guard;
  • Members of the Reserve component when serving on active duty;
  • Members of the National Guard component mobilized under federal orders for more than 30 consecutive days; or
  • Active duty commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration.

SCRA rights may also be exercised by anyone holding a valid power of attorney for the servicemember. Some SCRA protections also apply to dependents.

The SCRA has been amended to allow for lease terminations electronically

Today, many businesses provide consumers with the option to conduct transactions and communications electronically, whether it’s leasing a residence or purchasing an automobile. However, certain landlords and automobile dealers have denied servicemembers the convenience of terminating their leases electronically. Instead, servicemembers had to provide them with written notification by hand delivery, private carrier, or regular postal mail with return receipt requested.

This year, the SCRA was amended to allow qualified individuals the ability to terminate these lease agreements electronically by sending a notice of termination along with a copy of their orders – or a letter from their commanding officer via email or through a communications portal designated by the lender or agent.

Before waiving your SCRA rights, always consult with a qualified attorney

Servicemembers are sometimes asked or pressured to waive their SCRA rights in order to lease a residence. Recently, a servicemember reported that while going through a Permanent Change of Duty Station, she conducted her entire housing search online, came into town to pick up keys from the leasing office and was handed an SCRA waiver form. She reported feeling pressured to sign the waiver because she was new to the area and did not have anywhere else to live. Four-hundred thousand servicemembers undergo a Permanent Change of Duty Station annually, according to the United States Department of Defense .

It’s important to understand the impact that waiving your SCRA rights may have on your finances and your ability to complete your military duties. The waiver may allow landlords or creditors to obtain quick default judgments while a servicemember who is deployed or moved out of the area, for official reasons, has no way to defend him or herself. Servicemembers, including all officers, are also subject to routine national security clearance checks that include detailed reviews of their credit history, and these judgments can negatively impact your credit report, which can have long-term financial implications and make it difficult to obtain a clearance or promotion.

Before signing an SCRA waiver, make sure to read it carefully and talk with a military legal assistance attorney or private attorney for guidance.

If you believe your SCRA rights have been violated, you have options

It is illegal for you to be retaliated against for asserting your SCRA rights. If you believe your rights have been violated, you can:

What the CFPB is doing to help servicemembers know their rights under SCRA

We’ve developed several resources to help you better understand the full financial and legal protections available to you under SCRA:

Additionally, our Office of Enforcement has a single point of contact to provide training on certain aspects of federal consumer financial laws and technical guidance to military legal staff and personal financial readiness managers and staff.