What action must a credit union take if it believes a member does not qualify for interest rate reduction?

The requirement for a credit union when it suspects that a member does not qualify for an interest rate reduction typically aligns with regulations intended to protect servicemembers under laws such as the Servicemembers Civil Relief Act (SCRA). If a credit union believes that a servicemember's ability to repay was not materially affected by their military service, it must provide evidence to support this assertion. This means that in order to deny the interest rate reduction, the credit union must be prepared to substantiate its position in a court setting, demonstrating that the member's financial capabilities have not been compromised due to the demands of military service.

This process is designed to ensure fairness and transparency, preventing credit unions from automatically denying benefits without sufficient justification. The law prioritizes the financial stability of servicemembers and aims to safeguard their rights, making it critical for credit unions to have valid reasoning and evidence if they decide against granting such reductions.