First, to Susan G (a delayed post but I have been at a conference). I won't attempt to speak for others but we all have a duty to protect our banks. This means knowing the laws that relate to and cause our actions. By knowing more about the SSCRA, we know NOT to to sieze that car or foreclose on that home. We know to protect the spouse and children of the soldier from normal collection remedies.

That said, if we had this discussion a month or a year ago (and we have had these threads on the Web) and discussed the grad-student who borrowed, obtained a commission in the service and suddenly had a gross income and benefits of $40K annually; is there abuse when they want the reduction to a 6% loan? Their financial position is now improved, but you have reputation risks and must prove that they can pay the higher % loan they contracted for two months earlier and could afford. Imagine a few years ago when rates were all higher and 6% was nothing.

The knowledge compliance professionals get now will last a very long time, in good times and bad. It can only help as we and our banks strive for compliance and what is right. Gaining an understanding of the SSCRA should not be construed as being unpatriotic or uncaring.

Second, to Jim. I obtained counsel's opinion years ago when we still had a credit card portfolio. He opined that each advance would be viewed individually and based on the date of advance. The servicemember should not be incurring new debt if servicing existing debt is a problem.

While this may help solidify an opinion, before I'd consider taking any action I'd verify it with your own counsel.

FWIW, during Desert Storm we reduced the entire debt in effected accounts, including new draws, to 6%.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Another point to ponder--if the serviceperson has a small balance, you may find it cheaper to foregive the debt than the spend the time necessary to change the rate, waive late charges, etc., etc.

Tips for looking for financial information and records:

-- Keep abreast of the names of the suspects by using our list. (You can find a link to it on the front page). Circulate it around your bank to your wire transfer area, to the area where you sell cashier's checks and other cash equivalents, and compare the names against your customer database.

-- If you find any matches, complete an SAR accurately and completely. Explain the suspcious transaction as completely as possible in the narrative section of the SAR. Include the following information in the SAR, if applicable: any correspondent bank name, account info, names/locations of business entities, names of cities, countries
and foreign financial institutions linked to the transaction, especially if wire transfer
activity is involved; and account numbers and beneficiary names. IMPORTANT: In addition, on the SAR, check the "Other box on Part III, Line 35(a), of the SAR, and type in "terrorism" immediately following the box.

-- How can you report this information without violating the customer's financial privacy? You are specifically allowed to provide this type of information under the Right to Financial Privacy Act. Section 3403(c) of the RFPA states that a financial institution or its officer, employee, or agent may notify a government authority of the existence of information which may be relevant to a possible violation of any statute or regulation. This is the section that gives you authority to notify the government authorities, but limit the information you disclose to what the statute allows and do NOT attach documentation to your SAR. Turn the documents over only pursuant to a certificate of compliance.

-- Notify the FBI by going through FInCEN, which has set up a special number to facilitate passing leads on to the FBI from financial institutions. The number is 1-866-556-3974. [Note: Using this hotline is voluntary.]

-- Examine the OFAC list. 27 new names were added 9/24/01 and a great deal of additional information was added about those names on 10/01/01. You can get all that information on our OFAC page.

-- If you find a match with the OFAC list, BLOCK the accounts, freeze the funds, and report to OFAC immediately.

-- Also, block any new transactions with affected individuals and entities.

[This message has been edited by Mary Beth Guard (edited 10-01-2001).]

Okay - now to the nuts and bolts. Is there any guidance as to what we require from the borrower? I know this sounds petty at this point, but, how do we determine if the borrower's ability to perform is materially affected? Do we take a new application? Get a copy of an LES? Or, do we get a copy of their orders and figure based on their rank? From personal experience, I know that some of the people called to active duty will actually make more money than with their civilian jobs. Please let me know if any of you have policies in place on this. Thanks!!!

Excuse the ring - I just found the information in Ken Holmes' post. I should have gone further before I asked. Thanks anyway!!!