We recently had the OCC here and they suggested that we ask applicants at the time of loan application if they are Active Duty military. Just wondering if others are doing this and how they are accomplishing it?

Thank you.

Not many others are, in my experience. Regardless, I think it is a very good idea.

The few banks that do it that I have seen use a "covered borrower" statement at time of application - a simple "Are you or your spouse in the US Military" type question. (I'd get the exact wording from the Talent Amendment, because otherwise you'll leave out covered members, like the NOAA people.)

I am seeing this more and more as regulators are focusing on proper treatment of military borrowers - asking at outset, asking at time of collections actions, asking at time of foreclosure actions, etc.

We are in the process of setting up this process. We were going to collect the information at the time of application but then wondered about having that information before a loan decision has been made and whether there could be fair lending implications. We've decided to send our information request form with the early disclosures (or other loan docs if no early disclosures apply). We will also follow up at closing if we don't have the information by that time.

I may be missing an obvious point, but since the SCRA rate reduction only applies to preactive duty debt, would asking about active duty status matter at the time of a loan application?

It has to do with how they are treated in delinquency situations, which can occur at any time after origination.

duh, I knew I had to be missing something

Asking at app has to do with the Military Loan Act as well as the SCRA. While the 6% applies to pre-service debt, other protections apply regardless of when the debt was incurred.

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Almost forgot, Aug 14 I'll have a webinar on this. Watch for it.

I'll be listening Andy, because I'd like to know what "other protections" are associated with SCRA and active duty members that are within the context of Lending. As far as I know, Beachbum is correct - SCRA applies to pre-service incurred debt. I have read nothing indicating otherwise. But I'm willing to learn.

All protections of the SCRA, except for the rate reduction, apply to both pre & post active duty debt.

Review the sections addressing leases, stays, foreclosure/repossessions, legal actions, etc.

Thanks Dan.

Does anyone have sample application language they would like to share?

Please let me know on the Covered Borrower Identification Statement Form does the customer have to sign one each time he or she receives a loan? Please help me with guidelines on this form?

Thank you.

From the link I provided above:

Prior to becoming obligated on the transaction . . .

If you do not inquire about their current military status with each request then how do you propose to learn if their status has changed before they become obligated on the new transaction?

Would this apply to renewals or extensions as well?

I would.

Thank you for the link! It was exactly what I needed.

We collect the information at application. Our form has the same verbiage that the link specified.