Non payment of SSCRA Loan

We have a customer that is active duty. Loan was made prior to active duty. We have been unable to contact customer and have received no payment since July. The questions is if the loan goes to non-accrual or charge off should we or can we cancel the credit life to reduce the amount of the loan? I think this is a tough one. Any advice or feedback would be appreciated in this situation.

Yes, you can cancel the CL. You are under no obligation to continue credit life on the loan when the borrower fails to meet their responsibilities under the terms of the contract. The SCRA does not prohibit you from taking necessary actions.

Thanks for the help!

Bump- Has anyone else been faced with this?

I would SERIOUSLY think about this action and the reprocussions even if it IS legal, which I am not sure of. What if he dies overseas? Are you ready for that publicity? Cancelling it could really hurt you, we wouldn't even if we were able to. This is just MHO, not legal advice of course but I would talk to an attorney before taking this action.

Thank you. I'm embarrassed to say I never, ever thought about this person possibly dying.

If the person should die overseas more than likely in this case it will be due to "an act of war", which in most cases are not covered by credit life, or any other life policies.

The advice to talk to your bank's attorney is the most sound at this point.