[1]The Office of the Comptroller of the Currency (OCC [2]) has expressed concern that some banks and nonbank financial institutions are failing in the area of compliance with the Servicmember Civil Relief Act (SCRA [3]) of 2003 and not providing members of the military with all the protections the law affords them.
Speaking at the 2015 Association of Military Banks of America Workshop in Leesburg, Virginia, this week, Deputy Comptroller for Compliance Operations and Policy Grovetta Gardineer said [4] that in reviewing compliance with the SCRA, "Nonbanks and commercial banks alike continue to fail to provide all the safeguards required by law or worse, actively take advantage of the vulnerabilities unique to our servicemembers and their families. . .OCC has seen deficiencies in the practices and procedures at some banks related to their SCRA-compliance programs," according to Gardineer.
The OCC has directed banks to improve SCRA-compliance policies and procedures when determining whether servicemembers are eligible for SCRA-requested benefits for all of their accounts, not just the account for which benefits were requested. Banks are also expected to verify whether servicemembers are eligible for certain SCRA protections before seeking default judgments on credit extensions or before initiating the foreclosure or repossession process, according to Gardineer.
"OCC has seen deficiencies in the practices and procedures at some banks related to their SCRA-compliance programs."
"In conjunction with deficiencies in an SCRA-compliance program, we sometimes find problems on a wider scale; these failures involve problems with the bank’s enterprise-wide compliance risk management program," Gardineer said.
The OCC began annually reviewing financial institutions for compliance with the SCRA after a Government Accountability Office(GAO) report on mortgage foreclosures in 2012 that found "limitations in federal regulators' oversight of SCRA compliance." While the review is not required by law, it has become standard operating procedure for the OCC, Gardineer said.
As a result of these annual compliance reviews, the OCC has seen progress and found more "robust compliance" in the banks it regulates.
"In 2014, we cited 65 SCRA violations among large, midsized, and community institutions," Gardineer said. "For the first quarter of 2015, however, OCC examiners have only cited seven SCRA violations. Given this data, I hold out hope that these numbers will continue to trend down for the remainder of the year as compared to 2014."