I am auditing SCRA currently. The compliance policy was updated since the previous audit and wording was changed(it was completely fine last time). It now states that the cap only applies to mortgages and that the bank applies the 6% to other loans as a courtesy.

But Section 527 (a)(1) states: Limitation to 6 percent. An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent -
(a) during the period of military service and one year thereafter, in the case of an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage; or

(b)during the period of military service, in the case of any other obligation or liability.


So since they are stating that it is a courtesy to give the 6% cap to non-mortgage loans, they are requiring individuals to provide orders every single year instead of just checking the DMDC website. If they don't provide updated orders, they remove the benefits.

Did the regulation change?

Because to me any other obligation or liability is every non-mortgage loan.

The regulation did not change. You should look at revising the policy and your procedures to avoid a violation.

I am not the compliance officer, I am the auditor. I honestly just wanted to make sure I wasn't crazy or have been missing something the whole time. I will be writing the compliance officer up for a finding though. I have no idea why they changed it. The policy was perfectly fine in the last audit.

That would be a good reason to write them up