Recent DOJ SCRA enforcement actions

In the past week, the Department of Justice (DOJ) issued two enforcement actions for violations of the Servicemembers Civil Relief Act (SCRA). While these cases do not involve credit unions, they are good reminders that the DOJ takes SCRA violations seriously. Also, as the SCRA does not have implementing regulations, the kinds of actions DOJ requires of parties to consent orders to remedy SCRA violations can be helpful indicators of compliant practices.

On September 16, 2021, a storage service provider entered into a consent order with DOJ for enforcing a lien against a servicemember and auctioning off the contents of their storage unit. Section 3958 of the SCRA specifically addresses storage liens and limits a person from foreclosing or enforcing a lien on property or effects without a court order. While this case involves a storage unit, this is the provision that often applies to safe deposit boxes as these agreements are usually leases under state law. Section 3931 protects servicemembers against default judgments, such as an order in favor of the plaintiff because the defendant did not appear in court or offer a defense. In part, the law requires a plaintiff to file an affidavit with the court if the defendant fails to appear stating whether the defendant is in the military or that the plaintiff was not able to determine if the defendant is in the military.

In this case, a lien on a delinquent storage unit was enforced without a court order. The auctioned off property included not just household furnishings, but also military gear, mementos of a cousin who was killed in military action in Afghanistan, and a grandfather’s military service medals. As a result, the storage company will pay $60,000 in damages to the servicemember and a $5,000 civil penalty to DOJ. The company also agreed to some steps to ensure compliance with the SCRA:

 

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