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#2192291 - 09/12/18 01:22 PM SCRA Procedures
complofcr Offline
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HI! To my knowledge we haven't had a loan covered under SCRA within the last 10 years so this is unfamiliar to us. Can someone point me to some guidance on the procedures for SCRA? We have a customer that went active duty in June. I know we have to lower the rate to 6% and from what I've read we should effective date that rate change to the date of active duty. Are there any disclosures we provide the customer or anything that he has to sign? He has an unsecured loan and a loan secured by a mobile home only.
Thanks!

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Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#2192302 - 09/12/18 02:01 PM Re: SCRA Procedures complofcr
Adam Witmer Offline
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#2192305 - 09/12/18 02:12 PM Re: SCRA Procedures complofcr
complofcr Offline
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Thank you Adam!

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#2192676 - 09/14/18 07:35 PM Re: SCRA Procedures complofcr
Andy_Z Offline
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Foreclosure procedures should already include an SCRA component. Prior to foreclosure/repossession the borrower should be checked against the SCRA database. Now, add to that your rate reduction, elimination of late fees (they're interest under the SCRA) and reamortization dating back to active duty, and you have a good start. Mark the CIF file for special handling, look at other relationships with the borrower (or spouse) and include a safe deposit box relationship and you're well on your way.

You'll find webinars on SCRA and MLA available here as well. https://www.bankersonline.com/training
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#2193599 - 09/24/18 08:18 PM Re: SCRA Procedures complofcr
ahkcompliance Offline
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Midwest
Do we need to proactively identify borrowers who may be eligible under SCRA?

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#2193914 - 09/26/18 08:52 PM Re: SCRA Procedures complofcr
bcompliance Offline
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The bank only has to lower the interest rate if a covered borrower makes a request.
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#2193917 - 09/26/18 08:58 PM Re: SCRA Procedures complofcr
bcompliance Offline
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https://www.bankersonline.com/regulations/scra-527

(b) IMPLEMENTATION OF LIMITATION-


(1) WRITTEN NOTICE TO CREDITOR- In order for an obligation or liability of a servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of the military orders calling the servicemember to military service and any orders further extending military service, not later than 180 days after the date of the servicemember's termination or release from military service.


(2) LIMITATION EFFECTIVE AS OF DATE OF ORDER TO ACTIVE DUTY- Upon receipt of written notice and a copy of orders calling a servicemember to military service, the creditor shall treat the debt in accordance with subsection (a), effective as of the date on which the servicemember is called to military service.
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#2193918 - 09/26/18 09:03 PM Re: SCRA Procedures complofcr
ahkcompliance Offline
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Thanks! That is what our procedures include.

I am preparing for an exam and one of the questions how does the bank identify borrowers under SCRA.

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#2193922 - 09/26/18 09:23 PM Re: SCRA Procedures complofcr
ComplyCycle Offline
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Covered servicemembers need to be proactively identified prior to foreclosure, repossession, or eviction.

While bcompliance is correct that to receive an interest rate reduction the covered servicemember must make a request, there's no requirement to do so in order to receive the protections against foreclosure, repossession, or eviction. Ensure your procedures take these scenarios into account.

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#2194167 - 09/28/18 06:03 PM Re: SCRA Procedures ComplyCycle
bcompliance Offline
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Originally Posted By ComplyCycle
Covered servicemembers need to be proactively identified prior to foreclosure, repossession, or eviction.

While bcompliance is correct that to receive an interest rate reduction the covered servicemember must make a request, there's no requirement to do so in order to receive the protections against foreclosure, repossession, or eviction. Ensure your procedures take these scenarios into account.


that's correct. I was assuming ahkcompliance was referring to the 6% cap in the original post.
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#2194176 - 09/28/18 06:35 PM Re: SCRA Procedures complofcr
iheartcompliance Offline
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Do the SCRA foreclosure provisions apply to only consumer mortgages or do they apply to all mortgage loans?

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#2194197 - 09/28/18 07:49 PM Re: SCRA Procedures complofcr
Adam Witmer Offline
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From the 1st Q 2013 Consumer Compliance Outlook found here: https://consumercomplianceoutlook.org/2013/first-quarter/servicemember-financial-protection-webinar/

Foreclosure Protection
Do foreclosure rules apply only to the service member`s primary residence, or do they apply to all loans secured by a mortgage on a residence? Does it matter if the loan is for business purposes?

The SCRA’s foreclosure protections in section 3953 External Link apply to any obligation on real or personal property owned by a service member that is secured by a mortgage, trust deed, or other security in the nature of a mortgage. The obligation must have been originated before the service member’s military service, and the service member must still be obligated on it. The statute applies to loans for business purposes and loans secured by the service member’s residence, even if it is not the service member’s primary residence.
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All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2194222 - 09/28/18 09:09 PM Re: SCRA Procedures complofcr
Andy_Z Offline
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Adam is spot on. the SCRA is about protecting those who protect us and is not limited to just consumer or just business or just a primary residence but to all of this. The spirit and intent is the bigger picture here.
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