GAO Recommends NCUA Increase SCRA Exams

The U.S. Government Accountability Office (GAO) released the results of a study into the regulatory oversight of compliance with the Servicemembers Civil Relief Act (SCRA), which found the federal regulators’ oversight of SCRA compliance to be limited. In addition, federal investigations have identified at least 15,000 instances of financial institutions failing to properly reduce servicemembers’ mortgage interest rates and more than 300 improper foreclosures.

In the study, the GAO estimates that from 2007 through 2011, federal regulators only examined 48 percent of all banks and credit unions for SCRA compliance. The GAO also noted that the National Credit Union Administration (NCUA) had a lower percentage of SCRA compliance examinations than the Federal Deposit Insurance Corporation (FDIC) or the Office of the Comptroller of the Currency (OCC). Further, examiners only focused on loan files that were identified by the financial institutions as involving servicemembers.

The GAO recommends an independently selected statistical sample of loan files, which will provide greater assurance of SCRA compliance.

The GAO recommendations for Executive Action for the NCUA are:

  • The NCUA should take steps to increase the frequency with which examiners
    • Conduct testing of foreclosure files and, as applicable, other mortgage loan files; and
    • Employ testing methods that provide greater assurance that mortgage servicers are complying with the SCRA.
  • The NCUA should explore options to use existing mechanisms or develop new ones to share information related to SCRA compliance oversight.

What this means for credit unions is an increased focus on SCRA in upcoming examinations. While the GAO study focuses on mortgage loan files, credit unions should take a moment to evaluate their policies and procedures regarding SCRA.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Advocacy News, Compliance News, Federal, NCUA.