To amend the Servicemembers Civil Relief Act to provide improved interest rate relief for servicemembers during periods of military service.

June 9, 2005

Mr. RYUN of Kansas (for himself and Mr. WYNN) introduced the following bill; which was referred to the Committee on Veterans' Affairs

To amend the Servicemembers Civil Relief Act to provide improved interest rate relief for servicemembers during periods of military service.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Servicemembers Interest Rate Relief Act of 2005'.

SEC. 2. IMPROVED INTEREST RATE RELIEF.

Section 207(a) of the Servicemembers Civil Relief Act (50 U.S.C. App. 527(a)) is amended--

(1) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and

(2) by striking paragraph (1) and inserting the following:

`(1) IN GENERAL- An obligation or liability bearing interest that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not, at any time during the period of military service, bear interest at a rate in excess of the maximum rate allowable at such time.

`(2) MAXIMUM RATE ALLOWABLE- As used in this section the term `maximum rate allowable', with respect to an obligation or liability, means the lower of--

`(A) 6 percent per year; or

`(B) the annual rate of interest that (but for this section) would otherwise apply with respect to such obligation or liability, reduced by 1 percentage point (but not below zero).'.

SEC. 3. TECHNICAL AMENDMENTS.

Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. App. 527) is amended--

(1) in subsection (a)--

(A) in paragraph (3) (as so redesignated by section 2)--

(i) in the heading, by striking `IN EXCESS OF 6 PERCENT'; and

(ii) by striking `6 percent per year' and inserting `the maximum rate allowable'; and

(B) in paragraph (4) (as so redesignated by section 2), by striking `paragraph (2)' and inserting `paragraph (3)'; and

(2) in subsection (c), by striking `6 percent per year' and inserting `the maximum rate allowable'.

SEC. 4. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take effect 60 days after the date of the enactment of this Act, and shall apply with respect to servicemembers in military service on or after the effective date of this Act.

END