10 U.S.C. § 987 — Terms of consumer credit extended to

Page 894 TITLE 10—ARMED FORCES § 986 of the National Cemetery Administration by reason of section 2411(b) of title 38 is not enti- tled to or eligible for, and may not be provided, burial in— (1) Arlington National Cemetery; (2) the Soldiers’ and Airmen’s National Cem- etery; or (3) any other cemetery administered by the Secretary of a military department or the Sec- retary of Defense. (c) UNCLAIMED REMAINS OF MILITARY PRIS- ONERS.—Subsection (b) shall not preclude the burial at the United States Disciplinary Bar- racks Cemetery at Fort Leavenworth, Kansas, of a military prisoner, including a military pris- oner who is a person described in section 2411(b) of title 38, who dies while in custody of a mili- tary department and whose remains are not claimed by the person authorized to direct dis- position of the remains or by other persons le- gally authorized to dispose of the remains. (d) DEFINITION.—In this section, the term ‘‘burial’’ includes inurnment. (Added Pub. L. 105–85, div. A, title X, § 1077(a)(1), Nov. 18, 1997, 111 Stat. 1914; amended Pub. L. 107–296, title XVII, § 1704(b)(1), Nov. 25, 2002, 116 Stat. 2314; Pub. L. 109–163, div. A, title VI, § 662(b)(1)–(3), (c)(1), Jan. 6, 2006, 119 Stat. 3315; Pub. L. 115–232, div. A, title V, § 592, Aug. 13, 2018, 132 Stat. 1788.) Editorial Notes AMENDMENTS 2018—Subsec. (b). Pub. L. 115–232, § 592(1), substituted ‘‘Except as provided in subsection (c), a person who is ineligible’’ for ‘‘A person who is ineligible’’ in introduc- tory provisions. Subsecs. (c), (d). Pub. L. 115–232, § 592(2), (3), added subsec. (c) and redesignated former subsec. (c) as (d). 2006—Pub. L. 109–163, § 662(c)(1), substituted ‘‘Persons convicted of capital crimes; certain other persons: de- nial of specified burial-related benefits’’ for ‘‘Persons convicted of capital crimes: denial of certain burial-re- lated benefits’’ in section catchline. Subsec. (a). Pub. L. 109–163, § 662(b)(1)(B), substituted ‘‘any of the following persons:’’ for ‘‘a person who has been convicted of a capital offense under Federal or State law for which the person was sentenced to death or life imprisonment without parole.’’ and added pars. (1) and (2). Pub. L. 109–163, § 662(b)(1)(A), inserted ‘‘(under section 1491 of this title or any other authority)’’ after ‘‘mili- tary honors’’. Subsec. (b). Pub. L. 109–163, § 662(b)(2), in introductory provisions, substituted ‘‘who is ineligible for interment in a national cemetery under the control of the Na- tional Cemetery Administration by reason of section 2411(b) of title 38’’ for ‘‘convicted of a capital offense under Federal law’’. Subsec. (c). Pub. L. 109–163, § 662(b)(3), amended head- ing and text of subsec. (c) generally. Prior to amend- ment, text read as follows: ‘‘In this section: ‘‘(1) The term ‘capital offense’ means an offense for which the death penalty may be imposed. ‘‘(2) The term ‘burial’ includes inurnment. ‘‘(3) The term ‘State’ includes the District of Co- lumbia and any commonwealth or territory of the United States.’’ 2002—Subsec. (a). Pub. L. 107–296 substituted ‘‘of Homeland Security’’ for ‘‘of Transportation’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–163, div. A, title VI, § 662(e), Jan. 6, 2006, 119 Stat. 3316, provided that: ‘‘The amendments made by this section [amending this section, section 1491 of this title, and section 2411 of Title 38, Veterans’ Bene- fits and enacting provisions set out as notes under this section and section 2411 of Title 38] shall apply with re- spect to funerals and burials that occur on or after the date of the enactment of this Act [Jan. 6, 2006].’’ EFFECTIVE DATE OF 2002 AMENDMENT Amendment by Pub. L. 107–296 effective on the date of transfer of the Coast Guard to the Department of Homeland Security, see section 1704(g) of Pub. L. 107–296, set out as a note under section 101 of this title. EFFECTIVE DATE Pub. L. 105–85, div. A, title X, § 1077(b), Nov. 18, 1997, 111 Stat. 1915, provided that: ‘‘Section 985 of title 10, United States Code, as added by subsection (a), applies with respect to persons dying after January 1, 1997.’’ REGULATIONS Pub. L. 109–163, div. A, title VI, § 662(d)(2), Jan. 6, 2006, 119 Stat. 3316, provided that: ‘‘The Secretary of Defense shall prescribe regulations to ensure that a person is not interred in any military cemetery under the au- thority of the Secretary of a military department or provided funeral honors under section 1491 of title 10, United States Code, unless a good faith effort has been made to determine whether such person is ineligible for such interment or honors by reason of being a person described in section 2411(b) of title 38, United States Code, or is otherwise ineligible for such interment or honors under Federal law.’’ § 986. Policy regarding identification of gender or personal pronouns in official correspond- ence The Secretary of Defense may not require or prohibit a member of the armed forces or a civil- ian employee of the Department of Defense to identify the gender or personal pronouns of such member or employee in any official correspond- ence of the Department. (Added Pub. L. 118–31, div. A, title V, § 522(b), Dec. 22, 2023, 137 Stat. 249.) Editorial Notes PRIOR PROVISIONS A prior section 986, added Pub. L. 106–398, § 1 [[div. A], title X, § 1071(a)], Oct. 30, 2000, 114 Stat. 1654, 1654A–275; amended Pub. L. 107–107, div. A, title X, § 1048(c)(3), Dec. 28, 2001, 115 Stat. 1226; Pub. L. 108–375, div. A, title X, § 1062, Oct. 28, 2004, 118 Stat. 2056, prohibited the Depart- ment of Defense from granting or renewing security clearances for certain persons, prior to repeal by Pub. L. 110–181, div. A, title X, § 1072(b)(1), (3), Jan. 28, 2008, 122 Stat. 329, 330, effective Jan. 1, 2008. § 987. Terms of consumer credit extended to members and dependents: limitations (a) INTEREST.—A creditor who extends con- sumer credit to a covered member of the armed forces or a dependent of such a member shall not require the member or dependent to pay interest with respect to the extension of such credit, ex- cept as— (1) agreed to under the terms of the credit agreement or promissory note; (2) authorized by applicable State or Federal law; and (3) not specifically prohibited by this sec- tion. (b) ANNUAL PERCENTAGE RATE.—A creditor de- scribed in subsection (a) may not impose an an- Page 895 TITLE 10—ARMED FORCES § 987 nual percentage rate of interest greater than 36 percent with respect to the consumer credit ex- tended to a covered member or a dependent of a covered member. (c) MANDATORY LOAN DISCLOSURES.— (1) INFORMATION REQUIRED.—With respect to any extension of consumer credit (including any consumer credit originated or extended through the internet) to a covered member or a dependent of a covered member, a creditor shall provide to the member or dependent the following information orally and in writing before the issuance of the credit: (A) A statement of the annual percentage rate of interest applicable to the extension of credit. (B) Any disclosures required under the Truth in Lending Act (15 U.S.C. 1601 et seq.). (C) A clear description of the payment ob- ligations of the member or dependent, as ap- plicable. (2) TERMS.—Such disclosures shall be pre- sented in accordance with terms prescribed by the regulations issued by the Board of Gov- ernors of the Federal Reserve System to im- plement the Truth in Lending Act (15 U.S.C. 1601 et seq.). (d) PREEMPTION.— (1) INCONSISTENT LAWS.—Except as provided in subsection (f)(2), this section preempts any State or Federal law, rule, or regulation, in- cluding any State usury law, to the extent that such law, rule, or regulation is incon- sistent with this section, except that this sec- tion shall not preempt any such law, rule, or regulation that provides protection to a cov- ered member or a dependent of such a member in addition to the protection provided by this section. (2) DIFFERENT TREATMENT UNDER STATE LAW OF MEMBERS AND DEPENDENTS PROHIBITED.— States shall not— (A) authorize creditors to charge covered members and their dependents annual per- centage rates of interest for any consumer credit or loans higher than the legal limit for residents of the State; or (B) permit violation or waiver of any State consumer lending protections covering con- sumer credit for the benefit of residents of the State on the basis of nonresident or military status of a covered member or de- pendent of such a member, regardless of the member’s or dependent’s domicile or perma- nent home of record. (e) LIMITATIONS.—It shall be unlawful for any creditor to extend consumer credit to a covered member or a dependent of such a member with respect to which— (1) the creditor rolls over, renews, repays, re- finances, or consolidates any consumer credit extended to the borrower by the same creditor with the proceeds of other credit extended to the same covered member or a dependent; (2) the borrower is required to waive the bor- rower’s right to legal recourse under any oth- erwise applicable provision of State or Federal law, including any provision of the Servicemembers Civil Relief Act (50 U.S.C. 3901 et seq.); (3) the creditor requires the borrower to sub- mit to arbitration or imposes onerous legal notice provisions in the case of a dispute; (4) the creditor demands unreasonable notice from the borrower as a condition for legal ac- tion; (5) the creditor uses a check or other method of access to a deposit, savings, or other finan- cial account maintained by the borrower, or the title of a vehicle as security for the obliga- tion; (6) the creditor requires as a condition for the extension of credit that the borrower es- tablish an allotment to repay an obligation; or (7) the borrower is prohibited from pre- paying the loan or is charged a penalty or fee for prepaying all or part of the loan. (f) PENALTIES AND REMEDIES.— (1) MISDEMEANOR.—A creditor who know- ingly violates this section shall be fined as provided in title 18, or imprisoned for not more than one year, or both. (2) PRESERVATION OF OTHER REMEDIES.—The remedies and rights provided under this sec- tion are in addition to and do not preclude any remedy otherwise available under law to the person claiming relief under this section, in- cluding any award for consequential and puni- tive damages. (3) CONTRACT VOID.—Any credit agreement, promissory note, or other contract prohibited under this section is void from the inception of such contract. (4) ARBITRATION.—Notwithstanding section 2 of title 9, or any other Federal or State law, rule, or regulation, no agreement to arbitrate any dispute involving the extension of con- sumer credit shall be enforceable against any covered member or dependent of such a mem- ber, or any person who was a covered member or dependent of that member when the agree- ment was made. (5) CIVIL LIABILITY.— (A) IN GENERAL.—A person who violates this section with respect to any person is civilly liable to such person for— (i) any actual damage sustained as a re- sult, but not less than $500 for each viola- tion; (ii) appropriate punitive damages; (iii) appropriate equitable or declaratory relief; and (iv) any other relief provided by law. (B) COSTS OF THE ACTION.—In any success- ful action to enforce the civil liability de- scribed in subparagraph (A), the person who violated this section is also liable for the costs of the action, together with reasonable attorney fees as determined by the court. (C) EFFECT OF FINDING OF BAD FAITH AND HARASSMENT.—In any successful action by a defendant under this section, if the court finds the action was brought in bad faith and for the purpose of harassment, the plaintiff is liable for the attorney fees of the defend- ant as determined by the court to be reason- able in relation to the work expended and costs incurred. (D) DEFENSES.—A person may not be held liable for civil liability under this paragraph Page 896 TITLE 10—ARMED FORCES § 987 if the person shows by a preponderance of evidence that the violation was not inten- tional and resulted from a bona fide error notwithstanding the maintenance of proce- dures reasonably adapted to avoid any such error. Examples of a bona fide error include clerical, calculation, computer malfunction and programming, and printing errors, ex- cept that an error of legal judgment with re- spect to a person’s obligations under this section is not a bona fide error. (E) JURISDICTION, VENUE, AND STATUTE OF LIMITATIONS.—An action for civil liability under this paragraph may be brought in any appropriate United States district court, without regard to the amount in con- troversy, or in any other court of competent jurisdiction, not later than the earlier of— (i) two years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (ii) five years after the date on which the violation that is the basis for such liabil- ity occurs. (6) ADMINISTRATIVE ENFORCEMENT.—The pro- visions of this section (other than paragraph (1) of this subsection) shall be enforced by the agencies specified in section 108 of the Truth in Lending Act (15 U.S.C. 1607) in the manner set forth in that section or under any other applicable authorities available to such agen- cies by law. (g) SERVICEMEMBERS CIVIL RELIEF ACT PROTEC- TIONS UNAFFECTED.—Nothing in this section may be construed to limit or otherwise affect the applicability of section 207 of the Servicemembers Civil Relief Act (50 U.S.C. 3937). (h) REGULATIONS.—(1) The Secretary of De- fense shall prescribe regulations to carry out this section. (2) Such regulations shall establish the fol- lowing: (A) Disclosures required of any creditor that extends consumer credit to a covered member or dependent of such a member. (B) The method for calculating the applica- ble annual percentage rate of interest on such obligations, in accordance with the limit es- tablished under this section. (C) A maximum allowable amount of all fees, and the types of fees, associated with any such extension of credit, to be expressed and dis- closed to the borrower as a total amount and as a percentage of the principal amount of the obligation, at the time at which the trans- action is entered into. (D) Definitions of ‘‘creditor’’ under para- graph (5) and ‘‘consumer credit’’ under para- graph (6) of subsection (i), consistent with the provisions of this section. (E) Such other criteria or limitations as the Secretary of Defense determines appropriate, consistent with the provisions of this section. (3) In prescribing regulations under this sub- section, and not less often than once every two years thereafter, the Secretary of Defense shall consult with the following: (A) The Federal Trade Commission. (B) The Board of Governors of the Federal Reserve System. (C) The Office of the Comptroller of the Cur- rency. (D) The Federal Deposit Insurance Corpora- tion. (E) The Bureau of Consumer Financial Pro- tection. (F) The National Credit Union Administra- tion. (G) The Treasury Department. (i) DEFINITIONS.—In this section: (1) COVERED MEMBER.—The term ‘‘covered member’’ means a member of the armed forces who is— (A) on active duty under a call or order that does not specify a period of 30 days or less; or (B) on active Guard and Reserve Duty. (2) DEPENDENT.—The term ‘‘dependent’’, with respect to a covered member, means a person described in subparagraph (A), (D), (E), or (I) of section 1072(2) of this title. (3) INTEREST.—The term ‘‘interest’’ includes all cost elements associated with the exten- sion of credit, including fees, service charges, renewal charges, credit insurance premiums, any ancillary product sold with any extension of credit to a servicemember or the servicemember’s dependent, as applicable, and any other charge or premium with respect to the extension of consumer credit. (4) ANNUAL PERCENTAGE RATE.—The term ‘‘annual percentage rate’’ has the same mean- ing as in section 107 of the Truth and Lending Act (15 U.S.C. 1606), as implemented by regula- tions of the Board of Governors of the Federal Reserve System. For purposes of this section, such term includes all fees and charges, in- cluding charges and fees for single premium credit insurance and other ancillary products sold in connection with the credit transaction, and such fees and charges shall be included in the calculation of the annual percentage rate. (5) CREDITOR.—The term ‘‘creditor’’ means a person— (A) who— (i) is engaged in the business of extend- ing consumer credit; and (ii) meets such additional criteria as are specified for such purpose in regulations prescribed under this section; or (B) who is an assignee of a person de- scribed in subparagraph (A) with respect to any consumer credit extended. (6) CONSUMER CREDIT.—The term ‘‘consumer credit’’ has the meaning provided for such term in regulations prescribed under this sec- tion, except that such term does not include (A) a residential mortgage, or (B) a loan pro- cured in the course of purchasing a car or other personal property, when that loan is of- fered for the express purpose of financing the purchase and is secured by the car or personal property procured. (Added Pub. L. 109–364, div. A, title VI, § 670(a), Oct. 17, 2006, 120 Stat. 2266; amended Pub. L. 112–239, div. A, title VI, §§ 661(a), (b), 662(a), (b), 663, Jan. 2, 2013, 126 Stat. 1785, 1786; Pub. L. 114–328, div. A, title X, § 1081(b)(2)(A), Dec. 23, 2016, 130 Stat. 2418.) Page 897 TITLE 10—ARMED FORCES § 988 Editorial Notes REFERENCES IN TEXT The Truth in Lending Act, referred to in subsec. (c)(1)(B), (2), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables. The Servicemembers Civil Relief Act, referred to in subsec. (e)(2), is act Oct. 17, 1940, ch. 888, 54 Stat. 1178, which is classified generally to chapter 50 (§ 3901 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see section 3901 of Title 50 and Tables. AMENDMENTS 2016—Subsec. (e)(2). Pub. L. 114–328, § 1081(b)(2)(A)(i), inserted ‘‘(50 U.S.C. 3901 et seq.)’’ before semicolon at end. Subsec. (g). Pub. L. 114–328, § 1081(b)(2)(A)(ii), sub- stituted ‘‘(50 U.S.C. 3937)’’ for ‘‘(50 U.S.C. App. 527)’’. 2013—Subsec. (d)(2)(A). Pub. L. 112–239, § 661(a)(1), in- serted ‘‘any consumer credit or’’ before ‘‘loans’’. Subsec. (d)(2)(B). Pub. L. 112–239, § 661(a)(2), inserted ‘‘covering consumer credit’’ after ‘‘State consumer lending protections’’. Subsec. (f)(5), (6). Pub. L. 112–239, § 662(a), (b), added pars. (5) and (6). Subsec. (h)(3). Pub. L. 112–239, § 661(b)(1), inserted ‘‘and not less often than once every two years there- after,’’ after ‘‘under this subsection,’’ in introductory provisions. Subsec. (h)(3)(E). Pub. L. 112–239, § 661(b)(2), added subpar. (E) and struck out former subpar. (E) which read as follows: ‘‘The Office of Thrift Supervision.’’ Subsec. (i)(2). Pub. L. 112–239, § 663, amended par. (2) generally. Prior to amendment, par. (2) defined the term ‘‘dependent’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2013 AMENDMENT Pub. L. 112–239, div. A, title VI, § 661(c), Jan. 2, 2013, 126 Stat. 1785, provided that: ‘‘(1) MODIFICATION OF REGULATIONS.—The Secretary of Defense shall modify the regulations prescribed under subsection (h) of section 987 of title 10, United States Code, to take into account the amendments made by subsection (a) [amending this section]. ‘‘(2) EFFECTIVE DATE.—The amendments made by sub- section (a) shall take effect on— ‘‘(A) the date that is one year after the date of the enactment of this Act [Jan. 2, 2013]; or ‘‘(B) such earlier date as the Secretary shall specify in the modification of regulations required by para- graph (1). ‘‘(3) PUBLICATION OF EARLIER DATE.—If the Secretary specifies an earlier effective date for the amendments made by subsection (a) pursuant to paragraph (2)(B), the Secretary shall publish notice of such earlier effec- tive date in the Federal Register not later than 90 days before such earlier effective date.’’ Pub. L. 112–239, div. A, title VI, § 662(c), Jan. 2, 2013, 126 Stat. 1786, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply with respect to consumer credit extended on or after the date of the enactment of this Act [Jan. 2, 2013].’’ EFFECTIVE DATE Pub. L. 109–364, div. A, title VI, § 670(c), Oct. 17, 2006, 120 Stat. 2269, provided that: ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), section 987 of title 10, United States Code, as added by subsection (a), shall take effect on October 1, 2007, or on such earlier date as may be prescribed by the Secretary of Defense, and shall apply with respect to extensions of consumer credit on or after such effective date. ‘‘(2) AUTHORITY TO PRESCRIBE REGULATIONS.—Sub- section (h) of such section shall take effect on the date of the enactment of this Act [Oct. 17, 2006]. ‘‘(3) PUBLICATION OF EARLIER EFFECTIVE DATE.—If the Secretary of Defense prescribes an effective date for section 987 of title 10, United States Code, as added by subsection (a), earlier than October 1, 2007, the Sec- retary shall publish that date in the Federal Register. Such publication shall be made not less than 90 days before that earlier effective date.’’ MEETINGS WITH PRIVATE SECTOR USERS OF SYSTEMS Pub. L. 114–92, div. A, title V, § 594(b)(3), Nov. 25, 2015, 129 Stat. 834, provided that: ‘‘The Director of the De- fense Manpower Data Center shall meet regularly with private sector users of Defense Manpower Data Center systems used to identify covered borrowers and covered policyholders under military consumer protection laws to learn about issues facing such users and to develop ways of addressing such issues. The first meeting pur- suant to this requirement shall take place with [with- in] three months after the date of the enactment of this Act [Nov. 25, 2015].’’ INTERIM REGULATIONS Pub. L. 109–364, div. A, title VI, § 670(d), Oct. 17, 2006, 120 Stat. 2269, provided for the prescription of interim regulations to carry out this section, with interim rules not superseded by final rules expiring no later than 270 days after the effective date of this section (see Effective Date note above). § 988. Prohibition on ownership or trading of stocks in certain companies by certain offi- cials of the Department of Defense (a) PROHIBITION.—Except as provided in sub- section (b), a covered official of the Department of Defense may not own or purchase publicly traded stock of a company if that company is one of the 10 entities awarded the most amount of contract funds by the Department of Defense in a fiscal year during the five preceding fiscal years. (b) EXCEPTIONS.—This section shall not apply to the purchase or ownership of a publicly trad- ed stock of a company otherwise described in subsection (a) as follows: (1) If the aggregate market value of the holdings of the covered official, and the spouse and minor children of the covered official, in the stock of that company, both before and after purchase (in the case of a purchase), does not exceed the de minimis threshold estab- lished in section 2640.202(a)(2) of title 5, Code of Federal Regulations. (2) If the stock is purchased and owned as part of an Excepted Investment Fund or mu- tual fund. (c) DEFINITIONS.—In this section: (1) The term ‘‘covered official of the Depart- ment of Defense’’ means any of the following: (A) A civilian appointed to a position in the Department of Defense by the President, by and with the advice and consent of the Senate. (B) If serving in a key acquisition position (as designated by the Secretary of Defense or the Secretary concerned for purposes of this section), the following: (i) A member of the armed forces in a grade above O–6. (ii) A civilian officer or employee in a Senior Executive Service, Senior-Level, or Scientific or Professional position.