SCRA vs MLA: Different Protections
Servicemembers Civil Relief Act vs Military Lending Act
SCRA and MLA protect service members from different things. SCRA covers pre-service debts — loans and obligations you had before entering active duty. MLA covers new lending to active duty members.
SCRA protections: 6% interest cap on pre-service debts, lease termination rights, eviction protection, default judgment protection.
MLA protections: caps the Military Annual Percentage Rate (MAPR) at 36% on new consumer credit extended to active duty members and dependents. Prohibits mandatory arbitration, certain fees, and prepayment penalties on covered loans.
Key difference: SCRA requires you to request the benefit in writing with a copy of your orders. MLA protections are automatic — lenders must check the DoD database before extending credit and comply automatically.
Common confusion: SCRA does NOT cap interest on debts incurred during service. That's where MLA picks up — capping new lending at 36% MAPR.