Insights and Publications

SCRA & Military Lending at the Forefront: Are Changes on the Horizon?

May 19, 2016

As a financial services consulting services firm addressing many aspects of regulatory compliance and operational risk, we have broad exposure to the “alphabet soup” of banking regulations. One such regulation – the Servicemembers Civil Relief Act (SCRA) – has recently received a great deal of attention. Many lending institutions have devoted substantial resources towards ensuring that active duty Servicemembers are provided with both retrospective relief to which they are entitled and exceptional and consistent customer service.

We also continue to see regulators and federal law enforcement focused on military lending matters. Supervisory activity in 2015 was highlighted by three enforcement actions, filed by three different agencies, which totaled over $40 million in customer remediation and civil money penalties.

The Office of the Comptroller of the Currency (OCC) expressed concern directly last summer that Nonbanks and commercial banks alike continue to fail to provide all safeguards required by law or worse, actively take advance of the vulnerabilities unique to our servicemembers and their families… [the] OCC has [also] seen deficiencies in the practices and procedures at some banks related to their SCRA-compliance programs

Servicemember complaints submitted in 2015 to the Consumer Financial Protection Agency’s (CFPB) Office of Servicemember Affairs (OSA) also increased by roughly 13% compared to 2014 volumes – supporting the narrative that SCRA will continue to be a regulatory compliance and operational risk “hot topic” for financial institutions.

The past several years have seen a flurry of activity centered on the SCRA and military lending, including numerous pieces of pending legislation, and it appears as though this activity may continue into the near future. Download the Bridgeforce special report, SCRA & Military Lending at the Forefront, to learn more about recent SCRA trends and pending legislation related to military lending.