Protecting Military Servicemembers from Unfair Lending Practices

Attorney General Eric Holder held a news conference to announce the Department of Justice filed the first lawsuit involving student loans under the Servicemembers Civil Relief Act (SCRA). This law helps protect U.S. servicemembers because it caps interest rates on certain types of consumer loans, such as student loans, at six percent. The complaint alleges that the student lender Sallie Mae charged excessive rates to borrowers who filed documents proving they were members of the U.S. military and in some cases, Sallie Mae improperly obtained default judgments against servicemembers who were protected under the SCRA. He was joined by Secretary of Education Arne Duncan and attorneys from the two departments. close