Improving SCRA Benefit Utilization Act of 2025
Improving SCRA Benefit Utilization Act of 2025
Plain Language Summary
# Improving SCRA Benefit Utilization Act of 2025 - Summary **What the bill does:** This bill strengthens financial protections for active-duty military members by expanding the Servicemembers Civil Relief Act (SCRA). Currently, SCRA caps interest rates at 6% annually on debts servicemembers took on before entering active duty—but only if they notify creditors and prove their ability to pay was affected by military service.
This bill would make those protections easier to use by requiring creditors to automatically apply the 6% cap to *all* debts with that creditor, not just the specific ones mentioned in the notice. It also requires creditors to provide easy ways for servicemembers to submit required paperwork and mandates better training and outreach to ensure military members know these benefits exist. **Who it affects:** Active-duty servicemembers with existing debts, as well as creditors and lenders who work with military borrowers. **Current status:** The bill was introduced in the Senate in May 2025 by Senator Jon Ossoff (D-GA) and is currently in committee, meaning it hasn't yet been debated or voted on by the full Senate.
CRS Official Summary
Improving SCRA Benefit Utilization Act of 2025This bill expands interest rate protections under the Servicemembers Civil Relief Act (SCRA) and requires expanded training for and outreach to servicemembers regarding financial literacy and SCRA protections.The SCRA caps the maximum interest charged on any debt incurred by a servicemember prior to entering active duty at 6% annually if the servicemember's ability to pay is materially affected by active-duty status; servicemembers must provide notice and other documentation to creditors to receive this cap.The bill requires creditors to apply this cap to all of a servicemember’s obligations or liabilities with that creditor, regardless of whether a certain obligation or liability was specifically mentioned in the required notice provided by the member to invoke SCRA rights. Further, the bill requires creditors to provide all necessary mechanisms to ensure a servicemember is able to submit any required documentation.The bill also requires that the financial literacy training program provided to servicemembers include information about consumer financial protections afforded to such members and their dependents, including protections regarding interest rate limits under the SCRA. Additionally, the bill requires the military department concerned to provide written notice of benefits under the SCRA to servicemembers at the time they first enter military service and, for members of the reserve components, at the time they first enter service in the reserves and at any time when they are mobilized or ordered to active duty for more than 30 days.
Latest Action
Read twice and referred to the Committee on Armed Services.