Topic: Servicemembers Civil Relief Act (SCRA)
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We have a customer who is three months behind on his car loan payments. We know he is in the National Guard so we submitted an Active Duty Status request on the Department of Defense’s Defense Manpower Data Center’s website to confirm whether he had “active duty status.” His name was not in the database, so we repossessed his car. Now he claims that he has a letter confirming that he was on active duty status within 90 days of our repossession. If this is true, does that matter under the Servicemembers Civil Relief Act (SCRA)? Do we have to wait 90 days after his active duty status ends before repossessing his car? What is our liability if we were wrong in our understanding of the law?
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No, it does not matter if the customer can establish that he was on active duty within 90 days of your repossessing his car if he was not active at the time of repossession. While the SCRA extends certain protections to service members after the termination of their active duty status — such as protections…
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We know that the Military Lending Act (MLA) does not preempt state laws that provide service members with greater protections. Are there any such laws in Illinois?
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Yes, there are several Illinois laws that provide military members greater protections than the federal Military Lending Act that should be on your radar. For example, the Illinois Human Rights Act has made military status a protected class, providing broader protection than its counterpart federal law. In addition, the Illinois Service Member Civil Relief Act…
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Is the APR calculation the correct way to calculate interest on a residential mortgage under the Servicemembers Civil Relief Act (SRCA)? Does the 6% interest rate cap include the cost of credit life and credit accident and health insurance?
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No, the APR calculation is not the correct way to calculate the total interest on a residential real estate loan under the SCRA. The SCRA limits the maximum interest rate on loans to active duty military service members to 6%. “Interest” is defined broadly to include all service charges, renewal charges, fees, or any other…
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We want to add a message to our safe deposit box delinquency notices to notify service members of their protections under the Servicemembers Civil Relief Act. The message we are considering is “[Our Bank] will not open your safe deposit box or claim any right to the contents of your safe deposit box without a court order. This protection lasts throughout the term of your military service and for an additional 90 days after your military service ends.” Does Illinois have any specific timing requirement for storage lien enforcement or foreclosure?
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Your proposed notice correctly incorporates the Servicemembers Civil Relief Act, which states that a storage lien may not be foreclosed or enforced against a service member during his or her military service and for 90 days thereafter without a court order. There is no corresponding provision in Illinois, however, because the Illinois Service Member Civil…
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If a customer is repeatedly delinquent on mortgage payments, are we required to continually issue the Homeownership Counseling and SCRA notices under the National Housing Act?
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Yes, you must provide this notification every time the customer becomes past due. You are required to provide the notice to a delinquent borrower no later than 45 days after the date on which the borrower becomes delinquent. If the borrower subsequently misses another payment, you again must provide the notice within the 45-day window.…
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Are there any Illinois or federal compliance requirements that apply to commercial leases, besides the ECOA and FCRA adverse action notices? Our institution will be leasing out equipment that is owned by the bank.
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As a general rule, most compliance laws and regulations are aimed at protecting consumers and not commercial customers. For example, while Regulation M governs disclosures, advertising and other issues related to leases, it expressly states that it applies only to consumer leases. 12 CFR 1013.1(b). However, a few laws might apply to your commercial leases…