LAW REVIEW 1085
Improve the SCRA: Progress Made and What Remains To Be Done
By Captain Samuel F. Wright, JAGC, USN
4.0--Soldiers' and Sailors' Civil Relief Act (SSCRA) and the Servicemembers' Civil Relief Act (SCRA) Generally
In 2008, ROA and the Reserve
Enlisted Association (REA) jointly promulgated a “Top Ten Priorities List” for
Reserve Component (RC) members. Number 9
on the list is “Improving the Servicemembers Civil Relief Act.” In this article, I report on the progress
that has been made and what remains to be done to accomplish this goal.
In 1917, shortly after the
United States entered World War I, Congress enacted the Soldiers’ and Sailors’
Civil Relief Act (SSCRA) to protect the civil rights and financial interests of
those who were called to the colors, whether by draft, voluntary enlistment, or
mobilization from the National Guard or Reserve. The original SSCRA expired in 1919, at the
end of the wartime emergency period.
Congress reenacted the law in 1940 and made it permanent after World War
The SSCRA served our nation
well through two world wars, as well as the Korean War, the Vietnam War, and
the 1990-91 Persian Gulf War. By the
1990s, it had become apparent that this law required a comprehensive
rewrite. Judge advocates of all five
armed forces studied the SSCRA and came up with a rewrite. In 2003, Congress enacted their work product
as the Servicemembers Civil Relief Act (SCRA).
This law is codified in title 50 Appendix, United States Code, sections
501-596 (50 U.S.C. App. 501-596).
The enactment of the SCRA
brought several major improvements in this law.
For example, the SSCRA gave the person entering active duty the right to
terminate a lease of premises (apartment, house, office, etc.). The SCRA expanded this right to include the
right to terminate a lease of a vehicle.
Vehicle leases were not contemplated in 1917. In 2008, Congress amended the SCRA to give
the person entering active duty the right to terminate a cell phone contract
under certain circumstances.
On October 13, 2010,
President Obama signed into law the Veterans’ Benefits Act of 2010 (VBA-2010),
Public Law 111-275. Section 303 of
VBA-2010 significantly strengthened the SCRA enforcement mechanism, adding
provisions for enforcement by the United States Attorney General and for
substantial civil and criminal penalties, including imprisonment for up to one year
for individuals who willfully violate SCRA requirements. This 2010 amendment also explicitly provides
a private right of action to enforce the SCRA and for a court to order a
creditor, landlord, or other SCRA violator to pay the service member’s legal
fees if the member retained an attorney to enforce his or her SCRA rights. Please see Law Review 1082, available at www.roa.org/law_review.
Section 301 of VBA-2010 improved the SCRA
provision on terminating a lease on premises and vehicles upon call to the
colors, and section 302 improved upon the SCRA provision about terminating a
cell phone contract. Please see Law
Reviews 1079 and 1081.
In Law Review 0947, I
suggested SCRA improvements. Here are
the suggestions that have not yet been implemented.
Amend the SCRA to forbid discrimination based on
membership in a Reserve Component or the possibility of future utilization of
Under section 518 of the SCRA (50 U.S.C. App. 518), it is unlawful for a
creditor or other party to discriminate against or take an adverse action
against a servicemember based on the servicemember having applied for or received a
stay, postponement, or suspension under the SCRA. Under the current law, it
is not unlawful for a creditor or potential creditor to deny credit based on
the prospective borrower’s membership in a Reserve Component and the
possibility that the prospective borrower could be mobilized in the future
and could apply for or receive a stay, postponement, or suspension. ROA
proposes that Congress amend the SCRA to close this loophole. See Law Review 0943 (September 2009).
the SCRA to broaden the types of leases and contracts which the person
entering active duty can terminate without penalty.
Under the SSCRA, since 1917, a person entering active duty has been permitted
to terminate a lease on premises (apartment, house, office, farm, etc.). In
2003, Congress broadened this provision to enable the person entering active
duty to terminate a vehicle lease. In 2008, Congress enacted a new provision
to permit a servicemember to terminate a cell phone contract under certain
There are many other kinds of leases and contracts that the person entering
active duty may need to terminate. For example, we have heard from a Navy
Reserve medical corps officer who is a physician in private practice. He is
going on active duty for at least a year, and he is closing his private
medical practice. He has a lease on an expensive medical device, with four
years left to go on the lease, and the lessor will not let him out of the
lease. The lessor insists that this physician pay another $175,000 to lease a
medical device—the physician will be on active duty in Afghanistan and does
not need and cannot afford the device. Congress needs to amend the SCRA to
include leases and contracts of this nature, in addition to leases of
premises, vehicles, and cell phones. Please see Law Review 0944 (September 2009).
the SCRA to broaden the types of insurance that the servicemember is entitled
to reinstate after returning from active duty.
Under section 594(a) of the SCRA [50 U.S.C. App. 594(a)], a person returning
from active duty is entitled to reinstate health insurance that was in effect on the day before the
person entered active duty and that was terminated during the time the person
was on active duty. In a recent (2009) case, the United States District Court
for the Northern District of Texas ruled that income-replacement insurance
(compensating the insured for income lost when sickness prevents the insured
from working) is not health
insurance for purposes of section 594(a). As a result, a Marine
Corps Reservist is losing out on more than $450,000 in payments because he was called to the colors
and deployed to Iraq in 2004-05. This is exactly the sort of harm that
Congress enacted section 594(a) to prevent. Congress needs to amend the SCRA
to clarify that the person returning from military service has the right to
reinstate income-replacement insurance and other forms of insurance, as well
as health insurance narrowly defined. Please see Law Review 0945 (September 2009).
the SCRA to override agreements to submit future disputes to binding arbitration.
SCRA should explicitly preclude the application of boilerplate agreements to
submit future disputes to binding arbitration. Arbitrators are supposed to apply
substantive laws like the SCRA, but often they do not, and there is often no
remedy when an arbitrator ignores the law.
example, when a National Guard member or Reservist is called to active duty
and has thereby suffered a substantial loss of income, the service member is
entitled under the SCRA to have the interest rate on pre-existing financial
obligations (credit cards, auto loans, etc.) reduced to 6% during the active
duty period. But if you have agreed to
binding arbitration, the arbitrator may ignore this clear legal requirement
and continue the interest rate at the higher contracted level, and there
likely is no remedy.
the arbitration agreement often requires both parties (the creditor and the
debtor) to share in the costs of the arbitration, including the arbitrator’s
fee, and to pay this money up front.
This requirement often places the entire process beyond the financial
ability of the service member to participate. Thus, as with the Uniformed
Services Employment and Reemployment Rights Act (USERRA), we favor a
provision explicitly making unenforceable agreements to submit future
disputes to binding arbitration. Please see Law Review 0847 (October 2008).
As we prepare for the start
of the 112th Congress, please contact your United States
Representative and your two United States Senators and ask them to introduce
and/or support legislation along these lines.
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