Usually the phrases “Servicmember’s Civil Relief Act” and “enforcement action” don’t appear in the same hemisphere let alone the same sentence. However, that combination does occur in the OCC/DOJ announcement of a 07/26/12 enforcement action against Capital One. The full text may be found at the URL below.
It’s probably been a while since you took the SCRA 101 class in Bankers School, but, if you recall, the core of the Act is that servicemembers are provided relief from certain obligations, and it temporarily suspends many judicial and administrative proceedings and transactions involving civil liabilities when their service affects their ability to meet or attend to civil matters.
We all should be avid and vocal supporters of our military men and women. However, the nature of Capital One’s crimes does not appear to fit the punishment (as often occurs in this season of enforcement actions). From the text of the settlement, it appears that the grievous nature of the crime was one of not paying attention rather than an intentional infliction of financial distress targeted on our troops.
Regardless, there are several points that community banks should take from the enforcement action because, you know, stuff always rolls down hill. Institutions should
•Have procedures for determining whether the institution has servicemembers as customers;
• Understand the special protections servicemembers are afforded;
• Have procedures for timely providing any requested SCRA benefits;
• Obtain and retain accurate and complete records that document the basis for decisions regarding servicemembers’ eligibility for SCRA benefits or protections;
• Document the institution’s compliance with the Act;
• Have adequate oversight over any third-party vendors, such as marketing, sales, servicing, credit card accounts, mortgage loans, motor vehicle finance loans, and consumer loans and lines of credit;
• Follow the letter of the law, especially with regard to any collection activity (from collection calls through the sale of the repossessed/foreclosed collateral).
http://www.occ.treas.gov/news-issuances/news-releases/2012/nr-occ-2012-115.html
As always, ABS stands ready, willing, and able to partner with you in the battle.
