Staying on top of SCRA compliance

I’ve long advocated for the protections afforded by the Servicemembers Civil Relief Act (“SCRA”). I think we can all agree that if there was ever a group that your credit union should bend over backwards for it would be the men and women serving in our armed forces. I’m also of the opinion that the SCRA is one of the easiest Federal laws to comply with.

There are only two main provisions of the SCRA that your cooperative is responsible for. First, a servicemember may not be required to pay interest at a rate in excess of 6% on any obligation that is in existence at the time they enter active duty service. Second, your credit union is prohibited from foreclosing against a servicemember’s property during their term of active duty service and for a period of time following their return from active duty service.

Let’s talk more about the prohibition on foreclosure provision. The original text of the SCRA provided for a prohibition period of 90 days following the servicemember’s return from active duty. This was extended to 9 months under the Housing and Economic Recovery Act of 2008. In 2012, by way of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act, this prohibition period was temporarily extended to one year.

The temporary extension was set to expire on December 31, 2014 and revert back to the original 90 days under the SCRA. However, under the Foreclosure Relief and Extension for Servicemembers Act of 2014, the one year prohibition period was again temporarily extended until December 31, 2015. But this is where things get a bit murky…

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