Representatives from three Salt Lake banks went to a Utah National Guard open house Thursday night and promised to work with families of activated Guard members who may be having financial difficulty linked to their military service, said Col. Barrie Vernon.

First Security Bank, First Interstate Bank and Zions First National Bank all sent people to the open house, said Vernon, state judge advocate for the Utah National Guard. More banks will send representatives to future open houses, he said.The banks "have been working with us since August, they just haven't been tooting their own horns, so to speak," Vernon said. "They want to assist members who are in financial trouble."

Vernon and his counterparts in other branches of the military have been working since the Aug. 2 invasion of Kuwait on how best to help military families who suddenly found their financial situations muddled by reduced or delayed pay-checks.

For the first time in recent memory, he said, banks and military advisers have found themselves relying heavily on the Soldiers' and Sailors' Civil Relief Act of 1940.

"You could have gone to any bank six months ago and asked them what they were going to do with the soldiers' and sailors' act, and they would have said, `The what?' " Vernon said.

The act allows military families to reduce interest payments on their debt to 6 percent. It also allows them to seek a court order that would allow them to suspend payments entirely if they can prove reduced or interrupted income.

Vernon said the military couldn't begin to get court orders for everyone, so they wrote letters to creditors asking for reduction or suspension of payments.

"The first group (of letters) that went out, we kind of lumped the `suspend' and `reduce' into one sentence," he said. "(Creditors) only heard the word `suspend.' Now we emphasize the reduction rather than the suspension of the obligation. Because too many of them (military personnel) thought they had an absolute right to suspend (payments), whereas that's the extreme remedy, not the usual remedy."

It has been a confusing time for everyone, with some bad information floating around, he said.

"We've all - the creditors, the banks, the mortgage companies, the department stores - had a tremendous learning curve. Because we really hadn't done a whole lot of work under (the) soldiers and sailors (act) of this volume."

If he had it to do over, he said, "I would emphasize the reduction instead of the suspension. I would emphasize the early need for negotiations with the creditor. I would involve the Utah Bankers Association, the Utah credit unions, at an earlier stage.

"But you've got to understand," he continued, "once these units started getting called up, it was like a dam had burst. So I was being reactive instead of proactive. I'm not apologizing - we did the best we could to be reactive. Now we're starting to be a little more proactive.

"I don't want to say, in my opinion, everybody's cooperating," he said. "I think we now have a system in place to handle any problems that come up.

"I've talked to a great majority of the banks, the department stores, the credit unions, and they've said, `Hey, let us know what we can do.' "

Vernon is counseling military families to take advantage of the act's interest-reduction provision, either to better their cash-flow situations or to pay off their bills more quickly.

The act applies only to pre-existing obligations, not to bills run up during the time of active duty. Credit-card companies, for example, are stopping one card (with pre-existing balance) and issuing another with the regular 1 percent interest, he said.

The interest reduction "is a cost of doing business" for the creditors, he said. "They are eating a lot of money. I think there will be some lobbying efforts (to induce Congress) to raise the 6 percent."

The difference between the 6 percent interest payments and whatever the payments were before - say, 10 percent for home loans, 12 percent for car loans or 21 percent for credit cards - will not have to be paid back.

It is a different story for missed or reduced principal payments, however.

On a real estate loan, the act allows repayment of principal over the life of the mortgage. On non-real estate loans, military families have a period equal to the time of active duty to pay it back.

Vernon said the creditors he's talked to are willing to just tack the amount onto the end of the loan rather than add the repayment piece-meal.

"I don't want to scare my people into not using the act. If used prudently, and in the spirit in which the act was passed, it can be a great benefit," he said. "We are encouraging people to make whatever partial payments their circumstances permit."