BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.  20551

DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS

CA 09-2

March 24, 2009

TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS:

SUBJECT: Interagency Examination Procedures for the Servicemembers Civil Relief Act

The FFIEC Task Force on Consumer Compliance recently approved the attached examination procedures to be used when determining compliance with the Servicemembers Civil Relief Act (SCRA). The SCRA seeks to strengthen the national defense by providing for the temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the rights of servicemembers during their military service. The SCRA was signed into law on December 19, 2003, amending and replacing the Soldiers’ and Sailors’ Civil Relief Act of 1940. The law protects members of the Army, Navy, Air Force, Marine Corps and Coast Guard, including members of the National Guard, as they enter active duty, as well as commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration engaged in active service. Some of the benefits accorded to servicemembers by the SCRA also extend to servicemembers’ spouses, dependents and other persons subject to the obligations of servicemembers. The SCRA generally provides, among other benefits:

• reduction of the interest rate on any debt outstanding as of the date of entry into military service to six percent;
• protection from the sale, foreclosure, or seizure of property, based on a breach of such a secured obligation, during the period of the servicemember’s military service;
• limitations for individuals seeking to enforce civil liabilities of servicemembers concerning leases, installment contracts, mortgages, and liens;
• protection from default judgments; and,
• preservation of servicemembers' rights with regard to suspension of life insurance premiums, taxes, and business obligations.

If you have any questions, please contact Eric Morris, Supervisory Consumer Financial Services Analyst, at (202) 452-2928 or Paul Robin, Manager, Oversight and Policy at (202) 452-3140.

Sincerely,
(signed)

Sandra F. Braunstein
Director
Division of Consumer and Community Affairs

Attachment

Cross Reference: CA 05-3