Active members of the U.S. Army Reserve and National Guard are paying millions of dollars more in additional interest on loans than they need to under the law, a federal consumer watchdog said Wednesday.
Active members of the U.S. Army Reserve and National Guard are paying millions of dollars more in additional interest on loans than they need to under the law, a federal consumer watchdogThe Consumer Financial Protection Bureau said military personnel end up making the unnecessary payments because the Servicemembers Civil Relief Act isn't consistently being applied to their mortgage, auto and other loans.
Gittleman said service members must submit a request for lowered interest rates to their lender in writing, along with sending via certified mail a copy of the letter they received moving them to active duty. That requirement, and other steps in the process, are"a large administrative burden" that keeps active duty members from applying for interest rate reductions, she said.
In a statement to CBS MoneyWatch, the National Guard highlighted the importance of the Servicemembers Civil Relief Act for military personnel. "While we can't speak specifically to the CFPB report, the Servicemembers Civil Relief Act provides significant benefits to National Guard Soldiers and Airmen mobilized for active military duty," spokesman Robert Carver said."We welcome any effort that helps call attention to it."The findings come as interest rates on loans hit their highest level in years. The average credit card interest rate hit 19.
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