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Service Members Civil Relief Act of 20031 - page 5 / 6

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V. Lending — SCRA

Examination Checklist – Servicemembers Civil Relief Act

Section 518 - Exercise of Rights Under Act Not to

1.

Does the creditor refrain from taking adverse action against a servicemember solely because the servicemember exercised rights under the Act? (50 U.S.C. App. § 518) (If No, cite a violation of Section 518.)

Section 527 - Maximum Rate of Interest on

1.

Did the creditor reduce the interest rate on obligations of a servicemember or of a servicemember jointly with the servicemember’s spouse, incurred before military service, to no more than 6 percent during the period of military service upon receipt of written notice and a copy of the servicemember’s military orders? (527(a)(1)) Note that in the case of a mortgage, the 6 percent cap extends to one year following the end of military service. Interest under the SCRA includes all service, renewal, or other charges and fees with the exception of bona fide insurance charges. (If No, cite a violation of Section 527(a)(1).)

2.

Did the creditor forgive interest in excess of 6 percent? (527(a)(2)) (If No, cite a violation of Section 527(a)(2).)

3.

Did the creditor reduce any periodic payment due by the servicemember by the amount of the interest forgiven? (527(a)(3)) (If No, cite a violation of Section 527(a)(3). )

4.

Upon receipt of the written notice from the servicemember and a copy of the military orders, did the creditor apply the interest rate reduction retroactively to the date on which the servicemember is called to military service? (527(b)(2)) (If No, cite a violation of Section 527(b)(2).)

Section 532 - Protection Under Installment

1.

Did the creditor obtain a court order before rescinding or terminating contracts by a servicemember for the purchase, lease, or bailment of real or personal property (including a motor vehicle) for any breach of terms occurring before or during military service, provided a deposit or installment had been paid before entry into military service? Similarly, did the creditor obtain a court order before repossessing property due to breach of terms? (532(a)) (If No, cite a violation of Section 532(a).)

Section 533 - Mortgages and Trust Deeds

1.

Did the creditor obtain a court order before selling, foreclosing, or seizing real or personal property due to a breach of an obligation by a servicemember during the period of military service or within 9 months after without a court order? (533(c)) Note that HERA sunsets the 9 month extension on December 31, 2010, and the SCRA reverts to the original statutory provision of 90 days (If No, cite a violation of Section 533(c).)

Yes

No

FDIC Compliance Manual — June 2009

V-11.5

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