Servicemember Civil Relief Act (SCRA)
By Amy Kudlacek
While I don't claim to be an expert regarding SCRA compliance, there are a few key things that banks need to remember. At the last meeting of our local Compliance Professionals Peer Group, Examiner Tim Taubenheim of the FDIC Grand Island Field Office shared some common missteps.
First, most banks know that they need to reduce the rate on the loan to 6% but many forget to lower the payment amount as well. Second, the date the interest is lowered to 6% is retroactive to the date the service member was called to active duty. Finally, all loans secured by a borrower's primary residence must receive a one page notice prior to the loan becoming 45 days past due. This requirement is in addition to the Homeownership Counseling notice which has similar timing requirements. It would make sense that a bank would provide this notice on or with their Homeownership Counseling notice. You can access this notice at: http://www.hud.gov/offices/adm/hudclips/forms/files/92070.pdf
Once you get a system in place this should be an area with few compliance violations.