In prepared remarks to the Association of Military Banks, the OCC re-emphasized its focus on bank compliance with the Servicemembers Civil Relief Act (the “SCRA”) and its ramp up to enforce the Military Lending Act regulations which were recently passed.  Deputy Comptroller Grovetta Gardineer noted that the “OCC has seen deficiencies in the practices and procedures at some banks related to their SCRA-compliance programs.”  The OCC’s remarks set forth the following expectations:

  • Banks improve their SCRA-compliance policies and procedures for determining whether servicemembers are eligible for requested SCRA-related benefits in all accounts the borrower may have, not just the account that is subject of the request;
  • Banks calculate SCRA benefits correctly
  • Banks have policies and procedures in place for verifying the status of a servicemember’s eligibility for SCRA protections before seeking default judgments on extensions of credit or initiating foreclosure repossession processes

Inadequate compliance with the SCRA has been a component of several recent enforcement actions, including those against JP Morgan Chase and Bank of America.  The OCC remarks also serve as a reminder that banks should be ramping up for the new Military Lending Act rules which will begin to take effect in October 2015.