7316 - Maximum rates of interest and scheduling of debts.
§ 7316. Maximum rates of interest and scheduling of debts. (a) Applicability.--This section shall apply to members of the Pennsylvania National Guard who are called or ordered to active duty with the armed forces of the United States, other than active duty for training, or to State active duty under this title, and members of other reserve components who are called or ordered to active duty with the armed forces of the United States, other than active duty for training, when the period of active duty or State active duty is 30 consecutive days or more. (b) Maximum rates of interest.--No obligation or liability bearing interest at a rate in excess of the rate established under section 206 of the Soldiers' and Sailors' Civil Relief Act of 1940 (54 Stat. 1178, 50 U.S.C. App. § 526), as may be amended from time to time, incurred by a person in military service, as described in subsection (a), shall, during any part of the period of service which occurs after the enactment of this section, bear interest at a rate in excess of the rate under section 206, calculated as an annual percentage rate in accordance with applicable laws and regulations, unless, in the opinion of the court, upon application thereto by the obligee, the ability of the person in the military service to pay interest upon the obligation or liability at a rate in excess of the rate under section 206 is not materially affected by reason of service, in which case the court may make the order as in its opinion may be just. (c) Recalculation of repayment schedule.--Upon the reduction of the annual rate of interest pursuant to this section, there shall be a corresponding and proportionate reduction of the amount of any periodic payments made to satisfy the obligation based on a recalculation of the repayment schedule with the same repayment frequency and an interest rate equal to the rate established under section 206 of the Soldiers' and Sailors' Civil Relief Act of 1940, amortized over the original term of the loan. (d) Rescheduling of debt payments.--When a member's income is materially reduced as a result of his being called or ordered to active duty, the member, his spouse or his agent or attorney- in-fact may apply to his creditors for a rescheduling of his debt payments to take into account the material reduction in his income. The member, his spouse or his agent or attorney-in-fact shall provide the creditor with a statement of his income prior to being called or ordered to active duty and his income thereafter. Based on proof of a material reduction in income, the creditor shall thereafter adjust or reschedule the monthly or other periodic payments of the member. Nothing in this subsection shall be construed to relieve a member of the obligation to repay the principal of his debt after his release or discharge from active duty and restoration of his income at periodic payments equal to those in effect prior to activation. (e) Interest.--As used in this section, the term "interest" includes service charges, renewal fees, fees or any other charges, except bona fide insurance, in respect of the obligation or liability. (Apr. 16, 1992, P.L.161, No.29, eff. imd.) 1992 Amendment. Act 29 added section 7316.