I've been searching the Service Member's Civil Relief Act to find the answer to my question but I've gone cross-eyed trying to find the answer. I have a loan officer who states that if a servicemember goes 1 day past due on their loan we as the bank can contact their commanding officer right away. My gut says that's a big no-no but I'm not finding anything to back me up. Any help? Thank you in advance!

It's been quite some time since I did any collections but back in the mid 70's when I did some collecting on Ft. Leonard Wood, MO I recall if the service member had a rank of E-6 (or 7) that you could at that time contact their Commanding officer if you were having no success with working with the servicemember. However we didn't have all the privacy rules back then as we do today and I'm not sure if that military rule still applies. As I recall it had something to do with a military code of conduct E-6s and above were expected to meet.

I would be cautious contacting a commanding officer. When my son was in the Air Force, he told me to never contact his commander no matter what they told me because it had consequences.
For being late a day? I hope you are kidding!! But then, maybe that's how your bank treats every customer?

I can tell you that I've heard stories from some of our collectors who have not been able to get in touch with a debtor, and have left messages with a superior to have the debtor call back. The military is very serious about handling yourself responsibly and if they find out you're not paying your debts, they will make sure you get it taken care of!

A day late sounds very excessive and you'll get them in trouble for something pretty insignificant.

I believe the technicality of the LO is correct, but this really should be a last resort type action due to the impact it would have on your customer. Institutions I have worked for have done this, but only for serious delinquency and after warning the customer.

Institutions I have worked for have done this, but only for serious delinquency and after warning the customer.

That was our practice as well. As I recall we didn't contact the commanding officer until the account was 60 days past due and we had been unable to work anything out with the servicemember or we were unable to make contact with them.

Here's a link that we found helpful.

http://cfr.regstoday.com/32cfr513.aspx

I once had to contact an Airman's First Sergeant back when I was a Property Manager because my tenant became severely delinquent on his rent and was about to face eviction.

Contacting a First Sergeant should be your last resort.

As stated above, this is a privacy issue. As Dan stated, things were different in the past (let's just say before Truth in Lending). In fact when my father was enlisted in the AF in 1954 he was told by his commanding officer that there would be no loans from banks without his approval. So to buy his 1st car, he had to get his boss' approval. This was probably military custom and as I recall for anyone E4 or below. The military's position back then was that their members paid their debts - even 1-stripers.

Fast Forward to today. I retired from the AF in 2004 as a 20-yr officer. It is still the military's position that ALL their members pay their debts. But I don't know that a bank can simply call a Unit Commander. As RR Sarah points out the Army has some guidance (for it's members), and it alludes to the fact that Reg Z has some information (I didn't read it) on this. If nothing else, I would call the local base's JAG and talk to one of their lawyers about what banks have done in this situation, being mindful of the privacy issue. But I would read Reg Z first and talk to your own lawyer. If you ever do talk to a "commander", make sure it's a Unit commander. The 3-Star has better things to do, than take a call about a bad debt. So it would be good to know the unit this person belongs to. You would most likely be talking to a Lt. Colonel (AF, Army), or a Commander (Navy).

It was my experience within the officer ranks in a squadron, that if a person had a bad debt, the entire squadron knew about it (their credibility would be zero). Thus it was rare to see. I'd bet the mere mention of possibly calling the Commander would go along way toward resolution.

Original Anon here, Thank you all for the reponses. This loan officer has had issues with this customer in the past. (Becomes 60+ days past due and then makes the account current and repeats the situation) He wants to put a little fear into this customer and I agree calling at 1 day past due is excessive and I will forward on this information.