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Legislation follows Murray’s effort to demand corrective action for military borrowers who have been overcharged on their student loans
Murray: “When men and women in uniform risk their lives to serve our country, they shouldn’t have to worry about whether our government is going to hold up its end of the bargain.”


(Washington, D.C.) – Today, Senator Patty Murray (D-WA), the top Democrat on the Senate Health, Education, Labor, and Pensions (HELP) Committee, and a senior member of the Senate Veterans’ Affairs Committee, introduced the SCRA Enhancement and Improvement Act of 2016. This major legislation would increase protections for servicemembers, who in recent years have been subjected to unfair treatment when serving on active duty. Specifically, by enhancing the Servicemembers Civil Relief Act (SCRA), Murray’s bill would lower the cap on all loan interest rates to three percent when servicemembers are called to active duty, and zero percent if they are serving in areas where they are eligible for hostile fire or imminent danger pay. It would also permanently require federal student loan servicers to automatically extend the interest rate cap to military borrowers, and increase oversight of student loan servicers to make sure they are complying with the law. The bill also would increase other protections, including on mortgages, contracts, and auto loans, enhance the legal tools servicemembers and the Department of Justice can use to enforce the SCRA, and double the fines against those who violate servicemembers’ rights afforded by SCRA.


In 2014, complaints and allegations surfaced that student loan servicers had a pattern or practice of overcharging military borrowers on student loans by exceeding SCRA’s interest rate caps, resulting in settlements with the Department of Justice and Federal Deposit Insurance Corporation. Murray has led the effort to make sure servicemembers get refunds and ramp up oversight so the same violations do not happen again. These student loan overcharges follow a string of other forms of mistreatment, including foreclosing on servicemembers’ homes while they were deployed. In 2012 Murray introduced legislation to protect servicemembers from these predatory practices by mortgage lenders.


“In recent years, we’ve seen our servicemembers subjected to predatory practices and unfair treatment on several fronts, from overcharges on their student loans, to foreclosures on their homes when they’re deployed. That is simply unacceptable,” said Murray. “When men and women in uniform risk their lives to serve our country, they shouldn’t have to worry about whether our government is going to hold up its end of the bargain. I will continue to fight on behalf of women and men in uniform to make sure we uphold our responsibilities to them and their families.”

SCRA Enhancement and Improvement Act of 2016

Sponsored by Senator Patty Murray (D-WA)


When our nation’s servicemembers are called to active duty, the last thing they should have to worry about is whether they will receive fair treatment under the law on their student loans, mortgages, credit cards, and contracts. Unfortunately, the protections of Servicemembers Civil Relief Act (SCRA) have not been fully honored and this landmark law needs to be strengthened to reflect ongoing challenges that servicemembers and their families face.


Most notably, student loan servicers have overcharged military borrowers on their student loan interest rates when they were called to active duty, and they have subjected servicemembers to unnecessary delays, misinformation, and red tape.


Tragically, this scandal is only the latest in a series of abuses of servicemembers that also includes banks illegally overcharging and foreclosing upon those who are deployed. Such predatory practices and unfair treatment of servicemembers are simply unacceptable.


The SCRA Enhancement and Improvement Act of 2016 will protect our servicemembers and:


[if !supportLists]·         [endif]End the abusive practices of student loan servicers by requiring automatic application of the interest rate cap, timely responses to all inquiries, retention of communications with servicemembers, and a full explanation of any denial of an SCRA protection.


[if !supportLists]·         [endif]Require student loan servicers to have a designated service representative or point of contact for servicemembers and ensure these individuals are properly trained.


[if !supportLists]·         [endif]Reduce the interest rate cap to three percent to provide meaningful protection to servicemembers, including a zero percent cap for servicemembers eligible for hostile fire or imminent danger pay.


[if !supportLists]·         [endif]Mandate that sufficient notice is given when a loan is transferred or sold, and that all benefits or protections seamlessly transfer to the new loan servicer.


[if !supportLists]·         [endif]Forgive all federal and private student loan debt in the event the servicemember dies in the line of duty.


[if !supportLists]·         [endif]Expand SCRA interest rate protection to all debt regardless of when incurred, in order to cover consolidation loans and in recognition that the same challenges exist for borrowers regardless of when a debt was first incurred.


[if !supportLists]·         [endif]Clarify that servicemembers may bring a private right of action to enforce their rights and enhance the legal and oversight tools of the U.S. Department of Justice and the Consumer Financial Protection Bureau.


[if !supportLists]·         [endif]Double fines for parties found violating the protections afforded by the SCRA.


[if !supportLists]·         [endif]Expand certain protections on mortgages, leases, and cable and internet contracts.