computer program documentation, including any computer program testing and validation.
Determine the extent and adequacy of the training received by individuals whose responsibilities relate to compliance with the regulation. Review any training materials pertaining to the Act and determine if the training is comprehensive and covers the various aspects of the provisions that apply to the creditor’s offerings and operations.
Review compliance reviews or audit materials, including work papers and reports, to determine if:
The scope of any audits address all provisions of the SCRA, as applicable;
Transaction testing includes samples covering relevant product types and decision centers (for example, mortgage and credit card processing centers);
The work performed is accurate;
Significant deficiencies and their causes are included in reports to management or to the Board of Directors;
Management has taken corrective actions to follow-up on previously identified deficiencies; and,
The frequency of review/audit is appropriate.
If any complaints based on the SCRA have been filed against the institution, determine:
Why were they filed, and
How they were resolved.
If the institution has received any actual requests for relief under the SCRA, determine whether appropriately trained staff reviewed the requests and if appropriate records are maintained.
Interest Rate Reduction for Loans, Including Mortgages
6. Determine how the institution handles requests for interest rate reductions under the SCRA on an obligation incurred by a servicemember or by a servicemember and spouse jointly, before the servicemember entered military service.
7 Determine how the institution calculates the reduced interest rate. Does the institution include all service and renewal charges, as well as other fees and charges, with the exception of charges for bona fide insurance?
Determine whether the institution applies the interest rate reduction effective as of the date the servicemember was called to military service.
Determine whether the institution applies the interest rate reduction throughout the term of the servicemember’s military service for all credit products. In the case of a mortgage, the institution must continue to apply the
FDIC Compliance Manual — June 2009
V. Lending — SCRA
interest rate reduction for a one- year period following the termination of military service.
Residential and Motor Vehicle Leases
Determine, in the case of a residential lease entered into before the servicemember entered into military service or executed by the servicemember while in military service but who subsequently receives orders for a permanent change of station or for a deployment of at least 90 days, that the institution permits the servicemember to terminate the lease.
Determine if the institution permits the servicemember to terminate a motor vehicle lease where:
The motor vehicle lease is for personal or business use by the servicemember or his/her dependent; and,
The lease is executed by the servicemember before he/ she enters military service for a period of 180 days or more, or
The servicemember, while in military service, executes the lease and subsequently receives military orders for a PCS outside of the continental United States (this include a PCS to Hawaii or Alaska), or deployment with a military unit for a period of 180 days or more.
Foreclosure, Eviction from Bank-Owned Property
Determine, in the case of an institution acting as a landlord, that the institution does not evict a servicemember or his/her dependents8 from a residence covered by the Act occupied primarily as a residence during a period of military service except by court order.
Determine whether, in the case of real or personal property owned by a
service member before the servicemember’s military
service and is secured by a
mortgage, trust deed, or
similar security interest, the institution obtains a court order before initiating the sale, foreclosure, or seizure based on a breach of such a secured obligation during
the period of military service or nine months thereafter.
14.Determine, in the case of an institution that finances or purchases installment contracts for the purchase of real or personal property, that where a servicemember has paid a deposit or made a payment before entering military service, that the contract was not rescinded or terminated by the institution after the servicemember’s entry into service, absent a court order for a breach of the terms of the contract occurring before or during the military service, or the property repossessed because of the breach.
Dependents are defined in the SCRA as (a) the servicemember’s spouse, (b) the servicemember’s child, or (c) an individual for whom the servicemember provided more than one-half the individual’s support for 180 days preceding an application for relief under the SCRA.