Active Military Duty

A.1.16 Active Military Duty

The Servicemembers Civil Relief Act of 2003 (SCRA), formerly known as the Soldiers and Sailors Civil Relief Act of 1940 (SSCRA), is a federal law that gives military members some important rights as they enter active duty military service. The law is designed for active duty military personnel and reservists (and their spouse -- if applicable for joint credit accounts) to receive, as a result of military service economic hardship(s), an interest rate reduction (currently at 6.000%) for certain consumer and mortgage-related debt that was incurred prior to entering military service, for the period of time that the servicemember is on active duty. Under the law, the term’s interest includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability. The law also provides protection against certain legal actions during the term of active duty military service. The SCRA function is currently available in the system for simple interest Line of credit.

Any account that has been identified under SCRA requirements as eligible for the allowable benefits of active military duty for its primary borrower/spouse will have a new interest rate calculation based upon the 6.000% limit set by the SCRA. However, this change is subject to exception in case of accounts that already have an interest rate less than 6.000%. In such cases, the original interest rate that is less than 6.000% will continue.

To indicate that a borrower is on active military duty

Table A-31 Borrower On Military Duty

Transaction	Parameters
Borrower On Military Duty	Txn Date
	Borrowers Relation With Account
	Active Duty Order Reference

After you post this transaction, the Military Duty box (Account Details screen Activities section) and Active Military Duty box (Customer Details screen Military Service section) are selected. Oracle Financial Services Lending and Leasing changes the condition of the account to ON ACTIVE DUTY. Details of the transaction appear in the Military Services section on Customer Details screen.

Figure A-18 Active Military Duty

Description of "Figure A-18 Active Military Duty"

If the interest rate was greater than 6%, Oracle Financial Services Lending and Leasing will change the rate to 6% and adjust the payment accordingly. The CHANGE PAYMENT AMOUNT and RATE CHANGE transactions on the Transactions screen.

While posting an SCRA transaction for a borrower who is on Active Military Duty, system processes a lower payment amount regardless of prior payment history.

To indicate the payment parameters when the borrower is on active military duty

Table A-32 Borrower on Military Duty

Transaction	Parameters
Borrower On Military Duty, Parameter Name - CUST_ON_MLTRY_DUTY	Txn Date
	Borrowers Relation With Account
	Active Duty Order Reference
	Payment Calculation Method
	Rate
	Override Rate

The Payment Calculation Method has the following options in drop-down list for selection:

Outstanding Balance & Term - System calculates the new payment amount using Outstanding Principal, SCRA Rate, Remaining Term.
Contract Balance & Term - System calculates the new payment amount using Contract principal, SCRA Rate, Contract Term.

Figure A-19 Active Military Duty

Description of "Figure A-19 Active Military Duty"

Note:

If the borrower is delinquent during the life of loan, any outstanding balance would be paid along with last installment amount.

OFF-Military Duty

If the borrower is off-military duty, the transaction ‘BORROWER OFF MILITARY DUTY’ is posted to restores the interest and installment amount for the remaining term of the loan.

To indicate that a borrower is no longer on active military duty

Table A-33 BORROWER OFF MILITARY DUTY

Transaction	Parameters
BORROWER OFF MILITARY DUTY	TXN DATE
	BORROWERS RELATION WITH ACCOUNT
	SCRA OFF PAYMENT CALC METHOD

To adjust the contracted interest rate and Payment Amount, the SCRA off Payment Calculation Method has the following options in drop-down list for selection:

Restore Account Payment - System restores contract interest rate and installment amount.
- Remaining balance (if any) after Restore to Account Payment is adjusted to the last installment amount as a balloon payment.
- In case if a Rate Change transaction is posted on account before posting On Military Duty transaction, system calculates the remaining payment amount as per the changed interest rate and not the contract rate.
Calculate New Payment - System recalculates the payment amount using contract interest rate.

After you post this transaction, the Military Duty box (Account Details screen Activities section) and Active Military Duty box (Customer Details screen Military Service section) are de-selected. Oracle Financial Services Lending and Leasing changes the condition of the account to OFF ACTIVE DUTY.

Figure A-20 OFF Military Duty

Description of "Figure A-20 OFF Military Duty"

Parent topic: Monetary Transactions