Lending to Servicemembers

Presented by:
Mary Beth Guard and Jack Holzknecht

WHAT?
Two important laws impact loans to servicemembers and dependants. The Servicemembers Civil Relief Act (SCRA) and its predecessor have been around for years, but significant changes were made to it by HERA (the Housing and Economic Recovery Act of 2008) and many bankers are unfamiliar with new obligations and limitations put in place by that law.Plus, on August 31, 2007, the Department of Defense (DoD) published its final rule (32 CFR 232) that implements Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (JWNDAA), also referred to as the Talent Amendment. The new regulations were effective October 1, 2007. The regulations require new disclosures and place limits on the terms of certain loans to servicemembers or their families. We find that many financial institutions mistakenly believe that the rules do not apply to them.

While the regulations only apply to a very narrow band of loan products; the regulations impose a substantial burden on lenders that offer those products. And the potential penalties are huge.

This two-hour program explains in detail:

The HERA amendments to the Servicemembers Civil Relief Act

SCRA compliance for lenders in a nutshell

The D0D Servicemember lending regulations (Part 232);

How to comply with the regulations ; and

How to legally structure products to avoid Part 232 coverage.

CONTENT In terms of Part 232, this webinar clearly explains:

Which lenders are covered (virtually all);

Which borrowers are covered (a minority, but it only takes one);

• How to determine and verify if a borrower is a servicemember or a spouse, child or a dependant of a servicemember;
  • The new Covered Borrower Identification Statement;

What loan products are covered (limited, but most lenders have an occasional covered products, and it only takes one);

• How to analyze products to determine if they are covered or not;
• How to control the determination of whether your bank is covered or exempt;

Required disclosures;

• When to deliver the disclosures;
• How to deliver both the written and oral disclosures;
• Content of the disclosures;

The new MAPR;

• How to calculate the MAPR;
• Status of loan origination products and alternate calculation tools;
• How to calculate the MAPR before software updates arrive;

The limits on loan terms;

• MAPR limit;

State law preemption;

Transaction Limitations (While the limitations are designed to protect servicemembers, the limitations may actually harm those they are designed to protect.);

How to develop policies and procedures for the regulations; and

Penalties and remedies (these penalties are scary).

In terms of HERA and the SCRA, this webinar clearly explains:

Basic tenets of SCRA compliance

How HERA alters what lenders must do (and cannot do) under the SCRA

Common SCRA mistakes to avoid

Practical tips for carrying out your obligations

WHY?
Whether you lend extensively to servicemembers or only have an occasional transaction that involves servicemembers, these laws impact your lending operations. This webinar assures that your institution is complying with the amended SCRA provisions, as well as the JWNDAA provisions and the DoD regulations. Violations of JWNDAA can lead to substantial penalties; including fines and jail terms. Violations of SCRA can lead to civil liability and damages. Knowledge is the key to avoiding these adverse consequences.

WHO?
The program is designed for management of the lending department, compliance officers and others responsible for compliance in the loan department. The program will also be helpful for legal counsel seeking familiarity with these laws and regs.





VIEW A 10 MINUTE SAMPLE
(requires Windows Media Player and IE).


About the speakers: Mary Beth Guard
Mary Beth Guard has been teaching financial privacy to bankers since the early 1990s and has authored more than a hundred articles on private-related subjects. In addition, she has created privacy cheat sheets and matrices used by thousands of bankers nationwide. Currently serving as Executive Editor of BankersOnline.com, Mary Beth has had a long and distinguished career, focusing on the banking industry since 1984. Previously, Mary Beth served as EVP/General Counsel and COO for the Oklahoma Bankers Association and General Counsel for the Oklahoma State Banking Department.

Jack Holzknecht is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced consultant who has provided training to thousands of bankers and examiners for twenty-four years. He has the ability to identify the key compliance issues from each regulation. Jack's career began in 1976 as a federal bank examiner. He later headed the form and software and education divisions of a regional consulting company. In that capacity he developed loan and deposit form systems and software. He also developed and presented training programs to bankers in 43 states. Jack has been an instructor at compliance schools presented by the Georgia, Iowa, Kentucky, Pennsylvania, Nebraska, New York and Texas bankers associations. He developed and delivered compliance training for the FDIC and OTS for ten years. He is a Certified Regulatory Compliance Manager and a member of the National Speakers Association. He is also a "BOL Guru" at http://www.bankersonline.com/ and frequently answers compliance questions sent to "Bankers' Threads."

CD-ROM includes:

Complete presentation (including slides and audio)

Written Materials

Follow-up Q & A You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.