Did You Miss the Changes to the SCRA?


When the U.S. Congress passed H.R. 5515 – the John S. McCain National Defense Authorization Act for Fiscal Year 2019 in August of 2018, many people missed that section 600 made amendments to the Servicemembers Civil Relief Act (SCRA). Specifically, the proof of period of military service for purposes of interest rate reduction under the SCRA.

Section 207(b)(1) of the SCRA now reads:


(A) IN GENERAL.—Not later than 180 days after the date of a servicemember’s termination or release from military service, in order for an obligation or liability of the servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of—

(i) the military orders calling the servicemember to military service and any orders further extending military service; or

(ii) any other appropriate indicator of military service, including a certified letter from a commanding officer.


(i) IN GENERAL.—A creditor may use, in lieu of notice and documentation under subparagraph (A), information retrieved from the Defense Manpower Data Center through the creditor’s normal business reviews of such Center for purposes of obtaining information indicating that the servicemember is on active duty.

(ii) SAFE HARBOR.—A creditor that uses the information retrieved from the Defense Manpower Data Center under clause (i) with respect to a servicemember has not failed to treat the debt of the servicemember in accordance with subsection (a) if—

(i) such information indicates that, on the date the creditor retrieves such information, the servicemember is not on active duty; and

(ii) the creditor has not, by the end of the 180-day period under subparagraph (A), received the written notice and documentation required under that subparagraph with respect to the servicemember.

Credit unions should note that the independent verification by creditor is permissive since it uses “may” and is not required. In addition, the Military Lending Act in 32 CFR 232.5 does prohibit historical lookback using the DoD database to determine if a member had been a covered borrower as of the date of the transaction.

Question of the Week

How should an account be set up when a guardian is a company rather than a natural person?

When the documents are presented to your credit union, you should review them to ensure their validity. 

Next, you will want to establish an account that accurately reflects the relationship. An example of an account title would be: Care Planning Associates, guardian for Jane Doe. 

Also, Jane Doe’s SSN would be the SSN associated with the account since the funds are for her benefit. 

Since the guardianship company could have multiple employees, it is also important to establish who is authorized to transact on the account. A board resolution (or any type of document that would list who can act on behalf of the company) would help establish the correct authority on the account. This will make it easier for the company and the credit union, because both parties will know who can make changes on the account and transact on behalf of the member. 

Legal Briefs

Consumer Financial Protection Bureau (CFPB)

The CFPB released the sixth annual report from the Office of Servicemember Affairs (OSA) highlighting issues and emerging trends facing servicemembers, veterans, and military families.

Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of Jan. 27, 2019. The last update prior to this was Jan. 8, 2019.

Questions? Contact the Compliance Hotline: 1.800.546.4465; compliance@nwcua.org.

Posted in Compliance News.