Compliance Question of the Week

Does the SCRA require us to stop collection efforts on a member who has just gone on active military duty?

The SCRA does not require credit unions to discontinue all collection efforts once the service member goes on active duty. However, a service member who is having difficulties making loan payments or is being sued for repayment of an obligation may petition a court to reduce payments, or stay (suspend) any enforcement of the obligation. The credit union must cease all collection activity if it receives a court order to do so. Otherwise, the credit union can continue to collect on the debt. Proceed with caution if the nonpayment has reached a level where the credit union is contemplating repossession or foreclosure of any security property. For obligations incurred prior to active duty, both Sections 302 and 303 of the SCRA will require the credit union to first obtain a court order before seizing the property in order for the repossession or foreclosure to be valid.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.