Thus far SCRA enforcement activity has focused on the federal act, leaving the states overlooked. “Most states have an SCRA equivalent,” explains Kirk Jensen, Partner in BuckleySandler’s Washington, DC office. “One of the biggest differences is the populations they protect.”

State SCRA equivalents are designed to protect state guard members acting on behalf of the state; for example, when the state guard is called upon in the situation of Katrina, the wildfires, or the flooding in the Midwest. In each of the situations, the state’s SCRA equivalent would provide protections to servicemembers.

Often state SCRA equivalents provide similar benefits similar to the federal act, but they frequently provide additional benefits as well. One state provides for deferral of mortgage payments once a servicemember is activated. Another state provides benefits to the surviving spouse if the servicemember is killed in service.

As institutions develop their SCRA compliance programs, they need to keep state laws in mind. An institution must comply with applicable state laws in addition to the federal act. Jensen highlights the following challenges institutions need to be aware of:

  • States do not have an equivalent to the Defense Manpower Data Center (DMDC). This is probably the biggest challenge and increases the importance of procedures checking other information within then institution.
  • Procedures for determining when someone is eligible for benefits under the state’s SCRA equivalent. Which documentation will be used determine eligibility should also be clarified in the procedures along with any additional benefits the institution provides based on their business model.
  • Imperative for customer facing personnel to recognize borrowers under state SCRA statutes. Personnel need to know how to address the servicemember’s concerns or understand the institution’s procedures so they can be transferred to the appropriate individual.