The Servicemembers Civil Relief Act and private litigation risk

Greetings Compliance Friends!

I hope everyone is well rested from the shortened Independence Day week. For me, I am excited at the prospect of having left over Bar-B-Que for the next few days!

The SCRA often presents compliance challenges for credit unions due to the lack of implementing regulations and scarcity of formal guidance.  As a result, we must look to the law and enforcement actions for clarity on its requirements. A little while ago, we blogged about some of the more frequently asked questions on the SCRA that mostly addressed issues pertaining to the 6% interest rate cap on debts entered into prior to military service. We have also discussed the risk of federal enforcement from DOJ with regard to creditors that repossessed vehicles from servicemembers without following the SCRA procedures. Since that blog post, DOJ has received additional settlements for SCRA violations from the likes of Wells Fargo and CitiFinancial Credit Company. But what about the risk of a private right of action from the servicemembers themselves?

 

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