SCRA Protection – refunds and reimbursements

Compliance > Lending > Service Members > SCRA
Q: Is there a specific requirement to implement the interest rate cap if, for example, notification of active duty is delayed or if late charges are assessed in error? Can we make the choice to issue a cash refund and apply it to a future monthly payment or to the principal balance of the loan? Should we offer the service member the option of reimbursement?
 
A:  SCRA section 527 contains no specific requirement other than that the interest rate must be reduced, interest in excess of 6 percent must be forgiven, and the periodic payment must be adjusted as of the date of active duty. The statute does not require or prohibit any specific method of reimbursement.
 
 
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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