SCRA Protection – verbal request for benefits

Compliance > Lending > Service Members > SCRA
Q:  If the customer provides copies of orders from the military to begin active duty, but the customer does not request SCRA benefits, can the bank contact the customer and accept a verbal response as a request for benefits?
 
A:  With respect to the maximum interest rate on debt, section 527 of the SCRA states, “In order for an obligation or liability of a servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of the military orders calling the servicemember to military service and any orders further extending military service, not later than 180 days after the date of the servicemember’s termination or release from military service.” The statute does not prohibit lenders from providing SCRA benefits without a written request.
 
However, there is no similar requirement that the service member’s notice be in writing to receive foreclosure, eviction, and repossession protections dealing with rent, installment contracts, mortgages, liens, assignment, and leases covered in SCRA sections 531 through 533. Therefore, it is the lender’s responsibility to know the service member’s status prior to undertaking a foreclosure, eviction, or repossession.
 
 
ADDITIONAL INFORMATION – This Q&A was released by the Federal Reserve Board, in follow up to their Servicemember Financial Protection Webinar that was presented on September 10, 2012 - https://www.consumercomplianceoutlook.org/2013/first-quarter/servicemember-financial-protection-webinar/
 

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