Improving SCRA Benefit Utilization Act
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The bill would expand the 6% interest rate cap under the Servicemembers Civil Relief Act so it applies to all of a servicemember's debts with a creditor, not just those specifically named in a notice, and would require creditors to accept documentation online, by mail, or by fax.
It would also require the military to notify servicemembers of these protections when they enter service or are activated, and add SCRA interest-rate protections to required financial literacy training.
What this bill would do
What it would do
The bill would amend the Servicemembers Civil Relief Act so that once a servicemember notifies a creditor to invoke the law's 6% interest rate cap, the creditor must apply that cap to all of the servicemember's obligations or liabilities with that creditor, even ones not specifically named in the notice. It would also require creditors to let servicemembers submit any required documentation online, by mail, or by fax, at the servicemember's choice.
Separately, the bill would require the military department concerned to give servicemembers written notice of their SCRA benefits when they first enter service, and for reservists, when they first join the reserves and whenever mobilized or activated for more than 30 days. It would also add consumer financial protections, including SCRA interest rate limits, to existing financial literacy and preparedness training programs under title 10.
Key provisions
- 1Would require creditors to apply the 6% SCRA interest rate cap to all of a servicemember's obligations with that creditor, not just those named in the notice
- 2Would require creditors to let servicemembers submit required documentation online, by mail, or by fax, at their choice
- 3Would require the military department to give written notice of SCRA benefits when a person first enters military service
- 4Would require written notice of SCRA benefits to reservists upon joining and whenever mobilized or activated for more than 30 days
- 5Would add consumer financial protections, including SCRA interest rate limits, to required financial literacy training programs for servicemembers
Who would be affected
Active-duty and reserve servicemembers with pre-service debts, the creditors and financial institutions holding those debts, and the military departments responsible for financial literacy training and for notifying members of their legal protections upon entering or being activated for service.
Why it matters
Servicemembers could see the interest cap applied automatically across all their debts with a creditor rather than only the ones they specifically listed, reducing paperwork and the risk of missed savings. Creditors would face new documentation-acceptance and rate-application obligations, and the military would take on new notice and training duties.
What would change
Changes to existing law
Amends Section 992 of title 10, United States Code (Sec. 2)
Adds consumer financial protections, including SCRA interest rate limits, to required financial literacy and preparedness training content
Amends Section 105 of the Servicemembers Civil Relief Act (50 U.S.C. 3915) (Sec. 3)
Requires written SCRA benefits notice at entry into service and, for reservists, at entry and upon mobilization over 30 days
Amends Section 207(b) of the Servicemembers Civil Relief Act (50 U.S.C. 3937) (Sec. 4)
Requires creditors to apply the interest cap to all of a servicemember's obligations and to accept documentation via multiple submission methods
Agencies directed to act
Funding and costs
Congressional Budget Office estimate
CBO estimates H.R. 3159 would increase federal spending subject to appropriation by less than $500,000 over the 2026–2036 period, with no effect on direct spending, revenues, or the deficit.
CBO estimates the bill would have no effect on direct (mandatory) spending, revenues, or the federal deficit over the 2026–2036 scoring window. Any additional costs — stemming from the Department of Defense notifying reservists about Servicemembers Civil Relief Act (SCRA) benefits upon activation — would total less than $500,000 over that period and would be subject to appropriated funds. The bill imposes one private-sector mandate on creditors by broadening the SCRA interest rate limitation requirement, but CBO estimates the administrative cost of that mandate would be small and below UMRA's private-sector threshold ($214 million in 2026). The bill contains no intergovernmental mandates.
How implementation would work
Military departments would need to update onboarding and mobilization procedures to issue written SCRA benefit notices at the specified trigger points, and update financial literacy curricula to cover consumer protections and interest rate limits. Creditors would need to update internal processes so that once a servicemember invokes the interest cap with one notice, systems apply it across all accounts with that creditor, and would need to establish online, mail, and fax channels for accepting required documentation.
Legislative status & sources
Latest action
Ordered to be Reported in the Nature of a Substitute by Voice Vote.
Official CRS summary
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This 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.
Legislative subjects
Armed Forces and National Security; Credit and credit markets; Financial literacy; Interest, dividends, interest rates; Military education and training; Military personnel and dependents