Academic journal article ABA Banking Journal

An Update on the Soldiers' and Sailors' Amendments

Academic journal article ABA Banking Journal

An Update on the Soldiers' and Sailors' Amendments

Article excerpt

Following rapid action and overwhelming approval in both the Senate and House, President Bush signed the Soldiers' and Sailors' Civil Relief Act Amendments of 1991 in March. The bill is now Public Law 102-12.

The 1991 amendments expand and add to protections available under the act for eligible servicemembers and create a broad right to delay proceedings against qualifying borrowers.

The amendments do not address the original act's provision that reduces interest rates on affected servicemembers' qualifying loans to an annual rate no greater than 6%. However, these new amendments make it clear that activated reservists are eligible for the protections of the act, from the date of receipt of orders to active duty

Bankers should pay special attention to section six of the amendments. This section allows any member of the armed forces on active duty to have a court order delay any civil suit he is involved in until after June 30, 1991. The only limit to this right is that the borrower must be serving outside the state where the court proceeding is under way

An important change prevents any lender from denying or revoking a credit, changing the terms or amount of a loan agreement, or making an adverse credit report solely because the loan customer has applied for a stay, suspension, or postponement of proceedings or has invoked other rights under the act. …

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