The federal Servicemembers Civil Relief Act provides important financial protections for servicemembers and their families. Although the SCRA has been on the books for years, the subject of financial protections for servicemembers has become a focus of federal and state regulation. The Dodd-Frank Wall Street Reform and Consumer Protection Act created a powerful new federal agency, the Consumer Financial Protection Bureau. One of the CFPB's principal missions is the protection of the financial interests of servicemembers and their families. Many states have enacted laws that provide protection for servicemembers, as well.
Compliance Guide – Servicemembers Civil Relief Act is a handy reference tool that provides busy finance companies with a step-by-step roadmap to designing and implementing an SCRA compliance program.
This Guide addresses the following provisions that impact a creditor or lessor:
- Required reduction of the servicemember's interest rate to not more than 6% during military service;
- Required forgiveness of the "excess" interest over 6% during the period of military service;
- Required reduction of installment payment amounts for pre-computed contracts;
- Servicemember's ability to terminate motor vehicle leases without penalty;
- Limitations and/or prohibitions on a creditor's ability to terminate or rescind a contract or lease or repossess the personal property securing the obligation;
- Limitations on the creditor's ability to execute on a servicemember's personal property when the servicemember has personally guaranteed a business credit obligation;
- Limitations on a creditor's ability to obtain a default judgment against a debtor who may be a servicemember;
- Required stays of proceedings against servicemembers; and
- Dependents', co-obligors', and guarantors' ability to obtain relief from obligations involving the servicemember.
Compliance Guide – Servicemembers Civil Relief Act contains helpful suggestions for managing a creditor's SCRA compliance program in connection with other than real estate secured extensions of credit. The information is presented in an easy-to-read format, with as little "legalese" and as much useful and practical information as possible. The goal is to give the reader a solid, basic working knowledge of the Servicemembers Civil Relief Act.
According to its author, the Guide was written to explain, in terms that are as straight-forward as the complexity of the SCRA permits, when the SCRA applies, what a creditor must do under the SCRA and what a creditor is prohibited from doing under the SCRA.
This Guide does not include the SCRA's provisions that apply to real estate secured obligations, apartment leases, telephone contracts, storage liens, insurance policies, or taxes.
