MOAA has joined with other military and veterans service organizations in support of two lawsuits filed by servicemembers seeking full protection of their financial rights under the Servicemembers’ Civil Relief Act (SCRA), including the right to take part in class action lawsuits related to alleged SCRA violations.

The cases – filed by different servicemembers against American Express National Bank and Citibank – allege each financial institution violated the SCRA by “imposing interest rates in excess of 6% on qualified servicemembers,” according to Department of Justice statement on the lawsuits. Both defendants have sought dismissal of the class action suit, instead requiring each claimant to submit to private arbitration.

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“The burdens imposed on servicemembers by Defendant’s arbitration provisions are exactly what Congress intended to prevent,” according to the amicus, or “friend of the court,” briefs filed March 10 in both cases by MOAA, the VFW, the Enlisted Association of the National Guard of the United States (EANGUS), and the National Guard Association of the United States (NGAUS). “Credit card companies should not be allowed to impose a new or changed arbitration clause by notices sent to active duty servicemembers.”

The brief points to specific language in the Military Lending Act (MLA) barring creditors from policies where it “requires the borrower to submit to arbitration or imposes onerous legal notice provisions in the case of a dispute.” It also notes a passage in the SCRA allowing those “aggrieved by a violation” of the act to “be a representative party on behalf of members of a class or be a member of a class … notwithstanding any previous agreement to the contrary.”

Both financial institutions have argued MLA and SCRA protections only apply if the contested transactions were made while a servicemember was on active duty.

“If adopted by this Court, the interpretation urged by Defendant would force servicemembers to constantly open and close accounts to preserve their legal rights, risking harm to their credit and financial health,” according to both briefs. “Moreover … servicemembers do not have the time or resources to litigate claims about overcharged fees through individual federal cases, much less individual arbitration.”

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The interpretation would also create a confusing enforcement process, per the briefs, with one servicemember able to access SCRA protections for a credit card interest rate and another unable to access the same protections based solely on when the account was activated.

The lawsuits are pending in the U.S. District Court for the Eastern District of North Carolina.

Passed in 2003, the SCRA continues a line of consumer and financial protections for servicemembers dating back to the Civil War, to include civil relief acts passed in 1918 and 1940. SCRA enforcement has obtained more than $481 million in relief for more than 123,000 servicemembers since 2011, according to the Department of Justice.

The MLA passed three years after the SCRA and protects servicemembers and their families from being charged an annual percentage rate (APR) above 36% and from other loan practices, such as prepayment penalties, mandatory arbitration, and certain types of loan rollovers and renewals.