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HB 1606

Credit Regulation - Maximum Interest Rate for Active Service Members (Service Members Civil Relief Act)

2026 Regular Session Introduced by Darrell Odom

Maryland bill caps interest rates for active service members' debts under federal SCRA protections to shield military personnel from predatory lending during service.

First Reading House Rules and Executive Nominations
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Bill Summary · HB 1606

Legislative bill overview

HB 1606 amends Maryland's implementation of the Service Members Civil Relief Act (SCRA) to establish a maximum interest rate cap for active service members on certain consumer debts. The bill aims to provide financial protection for military personnel by limiting the interest rates creditors can charge on pre-service debts and ongoing obligations during active duty.

Why is this important

Active service members often face financial vulnerability due to deployment, reduced earning capacity during service transitions, and separation from civilian support systems. Interest rate caps can prevent predatory lending practices that disproportionately affect military families and help service members maintain financial stability during service. This protects a population with distinct vulnerabilities while implementing federal protections at the state level.

Potential points of contention

  • Rate cap level: Disagreement over what constitutes a reasonable maximum rate—too high may not protect service members, too low could reduce credit access or increase lending costs
  • Scope of covered debts: Questions about which debts qualify (credit cards, auto loans, personal loans, mortgages) and whether the cap applies fairly across debt types
  • Implementation burden: Creditors' concerns about administrative complexity, verification of active duty status, and compliance costs that may be passed to consumers
  • Market impact: Potential reduction in credit availability for service members if rates are capped below profitable lending thresholds

Compiled from official sources — confirm details with the bill’s official record.

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