Complying with the federal Servicemembers Civil Relief Act (SCRA): What Pawnbrokers Should Know
Updated and Redistributed November 6, 2014
The Servicemembers Civil Relief Act (SCRA) applies to all pawn transactions entered into with a service member if the transaction took place prior to the service member’s period of active duty service. If a pawn transaction was in effect prior to the time the service member either enlisted in the military or was called up to active-duty service, it could be affected by the SCRA. All the pledgor has to do is provide notice to the pawnbroker of his/her active duty status with a copy of their orders to trigger the protections of the SCRA. Thereafter, for the entire time of active-duty service, the pledgor is entitled to a maximum rate of 6 percent per year for interest and other charges except bona fide insurance, including any period of active duty service prior to the pawnbroker’s receipt of the notice and copy of orders. The SCRA does not apply to any pawn commenced after the period of active-duty service began.