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ALEXANDRIA, Va.-As U.S. military troops take care of business liberating the Iraqi people overseas, credit unions can help them and their families take care of financial business on the home front. “As American troops and coalition forces are defending freedom and liberating the people of Iraq, our prayers and support for these honorable men and women serving and their families remain foremost in our mind,” NCUA Chairman Dennis Dollar said in a recent statement. “We know the military operation is one that is about defending the values America holds dear and protecting our nation and allies. “Additionally, many young men and women in the military services have been called to serve in this cause, all credit unions should be knowledgeable and reminded of the Soldiers’ and Sailors’ Civil Relief Act which provides certain financial relief and legal protections for persons on active duty.” NCUA issued a Regulatory Alert (01-RA-14) for all credit unions on the act, which provides for discounted loan rates while on active duty as well as certain protections from evictions, repossessions, and foreclosures. “During this time of hostilities, I am confident that America’s credit unions will sustain the solid member service for the millions of Americans who are part of the military and who count on their credit union as a financial partner for their families,” Dollar said. “I commend all of those in the work of credit unions who serve daily to support our military and their families.” Under SSCRA, according to American Forces Information Service, active service persons may qualify for reduced interest on mortgage payments or credit card debt; protection from eviction if rent is under $1,200; and delay of all civil court actions, such as bankruptcy, foreclosure or divorce proceedings. The 6% maximum interest rate provision applies to all debts-including credit card debt, mortgages, car loans and other debts-incurred prior to the commencement of active duty, an AFIS Web site said. The interest rate cap only covers the period of active duty, according to www.military.com. NCUA’s Regulatory Alert explains that all charges and fees, except insurance premiums related to the obligation, are to be calculated in the interest rate. Other benefits may begin upon assignment and last for three months following active duty. However, active military personnel must request the interest rate reduction, as it does not occur automatically, and it only applies to those “materially affected,” which may be determined by a judge. The burden of proof lies with the creditor in court. According to a www.military.com frequently asked questions list, mortgage lenders should be provided a copy of the orders for activation; the Federal Housing Administration case number; and evidence that the debt precedes the activation date. When a lender is notified that a borrower is on active duty, the lender must tell the borrower the adjusted amount due, provide adjusted coupons/bills, and ensure that the reduced payments are not returned as insufficient. The protection applies to all loans, not just FHA/VA. [email protected]

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