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Bill would enhance credit rating protection

A Pennsylvania congressman wants the financial protections of the Servicemembers’ Civil Relief Act to better protect troops’ credit ratings.

Rep. Robert Brady, D-Pa., wants consumer credit bureaus to include a notation in the files of service members that any report of a late payment or nonpayment of a bill could be the result of military service.

This would apply to active and reserve members but would be limited to accounts opened by a person in the military before starting military service, which, in the case of Guard or reserve members, would be before they are mobilized.

Brady introduced his bill, HR 513, Wednesday, and it was referred to the House Veterans’ Affairs Committee, which has primary jurisdiction over the Servicemembers’ Civil Relief Act. He sponsored similar legislation in 2003 that drew 32 co-sponsors. His earlier bill was assigned to the veterans’ benefits subcommittee, which did not include it in updates made in legal and financial protections when Congress overhauled the law.

Under that law, formerly known as the Soldiers’ and Sailors’ Civil Relief Act, creditors are limited in collecting debts while a service member is deployed or mobilized, and interest charged on consumer credit is capped.

Brady’s concern is that while the law may protect service members, creditors who are not getting paid or are getting reduced payments may include this information when notifying credit bureaus about the status of accounts, and those statements — without a disclaimer about military service being a factor — could have long-range implications for service members.