Posted By: Valley girl
CFPB Guidance on SCRA Low Benefit Utilization - 12/19/22 04:44 PM
I read this guidance from one of our trades this morning and thought this recommendation was a bit overwhelming and am hoping it doesn't have the same impact as their FAQs did.
According to the CFPB, usage remains low because many creditors require that a servicemember notify the institution and provide a copy of their orders. Furthermore, the CFPB notes that some institutions require that this notification be submitted by mail or fax rather than electronically. In order to help servicemembers, the CFPB recommends that:
1. Creditors automatically apply SCRA rights by checking the Defense Manpower Data Center SCRA website monthly to identify borrowers eligible for the SCRA interest rate cap;
2. Creditors apply the SCRA interest rate cap to all accounts at an institution, even if the servicemember only invokes their right on a single account; and
3. Collecting data on SCRA interest rate reduction utilization.
According to the CFPB, usage remains low because many creditors require that a servicemember notify the institution and provide a copy of their orders. Furthermore, the CFPB notes that some institutions require that this notification be submitted by mail or fax rather than electronically. In order to help servicemembers, the CFPB recommends that:
1. Creditors automatically apply SCRA rights by checking the Defense Manpower Data Center SCRA website monthly to identify borrowers eligible for the SCRA interest rate cap;
2. Creditors apply the SCRA interest rate cap to all accounts at an institution, even if the servicemember only invokes their right on a single account; and
3. Collecting data on SCRA interest rate reduction utilization.