50 U.S.C. § 3937: The SCRA 6% Interest Rate Cap, Full Text

What § 3937 does to your money

This is the section that puts money back in your pocket. Debt you took on before entering military service, alone or jointly with your spouse, cannot bear interest above 6% a year during service. For a mortgage, trust deed or similar security the cap runs through service and one more year. Interest above 6% is forgiven, not deferred, and your monthly payment must drop by the forgiven amount, so a lender cannot keep the payment the same and simply pay down principal faster.

“Interest” is broader than the APR. Subsection (d) counts service charges, renewal charges, fees and any other charges except bona fide insurance, which is why annual fees and late fees on a pre-service card fall under the cap. Send the creditor written notice and a copy of your orders, or another appropriate indicator of service such as a commanding officer’s letter, no later than 180 days after you leave service, and the creditor must apply the cap back to the date you were called to service.

A creditor may check the Defense Manpower Data Center in place of your paperwork, and it gets a safe harbor only when that check shows you are not on active duty and the 180-day window closed without your notice. A creditor can ask a court to deny the cap if your ability to pay is not materially affected by service. Knowingly violating the cap is a crime punishable by a fine, up to one year in prison, or both.

Guides on this site that apply § 3937

• SCRA Interest Rate Cap: The 6% Rule, How It Works, How to File

  The SCRA 6% rule (50 U.S.C. § 3937): pre-service debt capped at 6%, excess forgiven, retroactive, mortgages one year after service. Who goes lower, how to file.

• Affirm SCRA: 6% Cap on Pre-Service Loans, Filed by Webform

  Affirm publishes a 6% SCRA cap for loans opened before active duty and takes requests by webform, not mail. What to attach, the refund math, and your letter.

• Aidvantage SCRA: 833-793-2135 & the Automatic 6% Cap

  Aidvantage services the ex-Navient loans behind a $60M SCRA settlement. The 6% cap is now automatic via the DoD match. Verify it and claim the 0% benefit.

• Ally Military Benefits: 6% SCRA Auto Loan Rate Cap

  Ally applies the SCRA 6% cap to auto loans you opened before active duty, waives late fees, and can extend payments. How to request it and what to send.

• American Credit Acceptance SCRA: 6% Cap, Request Form, 180-Day Window

  American Credit Acceptance caps pre-service auto financing at 6% and takes requests 180 days past release. Estimate your refund and write the letter.

• Amex Military Benefits: Annual Fee Waiver & 6% SCRA Cap

  Amex counts annual, late, and returned-payment fees as interest under the 6% cap. Estimate the refund it owes you and generate your letter on this page.

• Armed Forces Loans of Nevada Is Not Accepting New Applications

  Its application page says it is not accepting new applications (read October 9, 2026). For borrowers: MAPR 9.95% to 35.95%, how to pay, and 0% options.

• Bank of America SCRA: 4% Only If BofA Owns Your Mortgage

  Bank of America holds pre-service debt to 6%, and to 4% only on home loans it owns and services. Extra months, the refund choice, how to file. Checked Oct 2026.

• Barclays Military Benefits: SCRA 6% Cap, Not 0%

  Barclays caps existing debt at 6% and refunds fees and interest charged before your request. Estimate that refund and generate the letter in one place.

• Best Bank for Military: 10 Checking Accounts, Fees and Early Pay

  Military checking read on each bank's own site Oct 2026: monthly fee, ATM rebate, early pay. Navy Federal refunds up to $20 a month; Service CU up to $30.

• Best Bank for Veterans: Chase Waives $25, U.S. Bank $12, on a DD-214

  Chase waives its $25 Premier Plus fee and U.S. Bank its $12 fee for veterans who show a DD-214. Wells Fargo needs VA or retired pay deposited. What ends at ETS.

• Best Military Credit Unions: Who Can Join (and USAA Is Not One)

  Who can join Navy Federal, Service CU, Security Service, Andrews, Soarion and Eglin, read on each site Sept 2026. Family rules, NCUA $250,000, USAA is a bank.

4 of the site’s state pages also cite § 3937 when they compare a state law to the federal rule.

Enforcement record: 7 Justice Department cases

Cases in the site’s DOJ enforcement ledger about the conduct § 3937 governs, newest first, each transcribed from the Justice Department’s own record.

• Citibank, N.A. (Espin v. Citibank, private class action) (2023)

  On September 29, 2023, the court denied Citibank’s motion to compel arbitration, adopting the position the United States advocated. The underlying rate-cap claims continued in litigation; this record reflects the arbitration ruling only.

• American Express National Bank (Padao v. American Express, private class action) (2023)

  No settlement stated in the DOJ record; the entry documents the United States backing servicemembers’ right to press SCRA rate-cap claims as a class.

• BayPort Credit Union (2022)

  Consent order (March 18, 2022): $69,443.10 to 24 servicemembers, a $40,000 civil penalty, and changes to BayPort’s SCRA rate-benefit and repossession policies plus employee training.

• Westlake Services, LLC and Wilshire Commercial Capital (2022)

  Settlement addendum (September 27, 2022): $185,460 to 250 servicemembers who were not backdated or who waited more than 60 days, an additional $40,000 civil penalty, and revised SCRA policies, procedures, and training.

• Conn Credit I, LP (2020 to 2021)

  Consent order (entered January 29, 2021): refund all overcharged interest plus an additional $500 to each servicemember, a $50,000 civil penalty, and an independent consultant hired to identify every affected servicemember, over a three-year term.

• Sallie Mae (Navient Solutions, Navient DE Corporation, Sallie Mae Bank) (2014)

  $60 million in compensation, with about 60,000 servicemembers estimated to receive payments, plus a $55,000 civil penalty. Sallie Mae also had to ask all three credit bureaus to delete negative entries caused by the overcharges and improper judgments, and to stand up a streamlined SCRA intake process.

• Capital One, N.A. and Capital One Bank (USA), N.A. (2012)

  Approximately $12 million: about $7 million in damages (at least $125,000 plus lost equity per unlawful foreclosure, at least $10,000 plus lost equity per unlawful repossession) and a $5 million fund for servicemembers shorted on rate-cap benefits, with any remainder donated to servicemember charities. Independent audits could add more.

The full text of 50 U.S.C. § 3937

From the United States Code, 2024 Edition, current through January 6, 2025, as published by the U.S. Government Publishing Office on GovInfo (retrieved October 10, 2026). No amendment enacted after the edition cutoff was found on Cornell LII or in GovInfo’s compiled SCRA (amended through Pub. L. 118-159, Dec. 23, 2024). House style: the Code’s em dashes before a list are shown as colons, and en dashes as hyphens or “to”; no word of the text is changed.

Enacted and amended by: (Oct. 17, 1940, ch. 888, title II, §207, as added Pub. L. 108-189, §1, Dec. 19, 2003, 117 Stat. 2844; amended Pub. L. 110-289, div. B, title II, §2203(b), July 30, 2008, 122 Stat. 2849; Pub. L. 110-389, title VIII, §807, Oct. 10, 2008, 122 Stat. 4189; Pub. L. 111-275, title III, §303(b)(1), Oct. 13, 2010, 124 Stat. 2877; Pub. L. 115-232, div. A, title V, §600, Aug. 13, 2018, 132 Stat. 1793.)

What changed, and when

The Office of the Law Revision Counsel’s amendment notes for § 3937, newest first.

• 2018: Subsec. (b)(1). Pub. L. 115-232 amended par. (1) generally. Prior to amendment, text read as follows: "In order for an obligation or liability of a servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of the military orders calling the servicemember to military service and any orders further extending military service, not later than 180 days after the date of the servicemember's termination or release from military service."
• 2010: Subsec. (f). Pub. L. 111-275 struck out subsec. (f). Text read as follows: "The penalties provided under subsection (e) are in addition to and do not preclude any other remedy available under law to a person claiming relief under this section, including any award for consequential or punitive damages."
• 2008: Subsec. (a)(1). Pub. L. 110-289, §2203(b)(1), substituted "in excess of 6 percent: " for "in excess of 6 percent per year during the period of military service." and added subpars. (A) and (B). Subsec. (d). Pub. L. 110-289, §2203(b)(2), added subsec. (d) and struck out former subsec. (d). Prior to amendment, text read as follows: "As used in this section, the term 'interest' includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability." Subsecs. (e), (f). Pub. L. 110-389 added subsecs. (e) and (f).