New bill would protect military members’ right to go to court


A few years ago, the Servicemembers’ Civil Relief Act was strengthened to provide new protections to active duty military. But after some companies were reportedly finding loopholes and other ways to get around parts of the law, a new bill has been proposed to ensure military members’ rights are protected.

Protections under the law

For those who are unfamiliar with the Servicemembers’ Civil Relief Act, it was instituted to protect all active military families from foreclosures, evictions, and other financial consequences of military service, in order to allow them to devote full attention to duty and relieve stress on the family. The law is intended to postpone or suspend certain obligations, such as:

  • outstanding credit card debt
  • mortgage payments
  • pending trials
  • taxes
  • terminations of lease.

The law protects active-duty service members and their families from losing their cars or homes to repossession without a court order. It allows them to terminate certain contracts while on active duty and requires lenders to reduce interest rates on any loans to 6%. The Act also covers lapses in health and other insurance, as well as default judgments in court cases.

For example, under the law, if you are transferred to a new duty station, mortgage lenders are required to immediately grant you permission for a short sale if you’re upside down on your home. Also, lenders can’t go after you for deficiencies on any loan that was originated before June 30, 2012.

The problem

But according to the sponsors of the proposed bill, companies are burying language in the fine print of contracts that essentially revokes these rights once the military member signs it.

“Often service members sign contracts that include arbitration clauses buried in the fine print, and this eliminates their access to the courts, which can limit their ability to assert their rights and reach a fair resolution,” said one of the bill’s sponsors, Senator Jack Reed, a democrat from Rhode Island.

Once a contract with an arbitration clause is signed, the service member then loses his or her right to challenge things like repossessions or foreclosures with a lawsuit. Instead, the dispute has to be settled by arbitration, which is a binding resolution settled outside the court system.

And according to a report by The New York Times, those who are forced into an arbitration agreement ‘often face a system stacked against them from the start. Arbitration gives companies so much latitude that in some cases they can require their employees and customers to go to Christian arbitration, where the Bible guides the process.’

The goal of the new bill

To help protect against these types of situations, the new bill is intended to provide service members and their families more protections if they believe a company has violated the Servicemembers’ Civil Relief Act. It would allow them to avoid arbitration and challenge repossessions or foreclosures in court.

Reed said the proposed bill “will better protect our military families while the men and women of our armed forces protect our nation.”


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