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PERSPECTIVES

Protecting our protectors: SCRA and the CFPB's Office of Servicemember Affairs.

September 09, 2011
John P. Carey, Chief Administrative Officer, North America Consumer Banking

"The purpose of the SCRA is no less lofty than to provide servicemembers' peace of mind, knowing that while they put their lives at risk to protect this great nation, their personal affairs and economic interests will be protected". [1]

We owe an enormous debt to the men and women of our armed forces -- not only to those currently serving in the military, but also to those who have served our country in the past. It is incumbent upon all of us, including those in the financial services industry, to treat these men and women, and their families who support them at home, with the dignity, respect, and protection they deserve.

Recognizing the importance of protecting servicemembers and their families, the federal government has, since the Civil War era, taken a number of steps to ensure that certain legal actions, such as bankruptcy, breach of contract or foreclosure proceedings, are put on hold until a servicemember returns from active duty. The most recent embodiment of these protections is the Servicemembers Civil Relief Act (SCRA), which replaced and enhanced the Soldiers' and Sailors' Civil Relief Act.

The SCRA provides many forms of relief to servicemembers, such as:

  • Allowing for termination of leases;
  • Offering protection from eviction;
  • Placing a 6% cap on interest rates during active duty and, for mortgages, for one year thereafter, on credit obligations incurred prior to military service or activation;
  • Staying certain proceedings, including foreclosures; and
  • Reopening default judgments.

To learn more about the protections afforded under the SCRA, there are a number of online resources, such as https://www.uscg.mil/legal/la/Legal_Assistance_SCRA.asp.

The Consumer Financial Protection Bureau (CFPB) has also taken a special interest in the servicemember community, opening the Office of Servicemember Affairs earlier this year. The office is led by the wife of a retired general who, as such, is well suited to understanding the unique needs of and challenges facing servicemembers and their immediate families.

As described in the U.S. Treasury Department's press release upon its establishment, the Office of Servicemember Affairs works in partnership with the Department of Defense to help ensure that: "military families receive the financial education they need to make the best financial decisions for them; complaints and questions from military families are monitored and responded to; and federal and state agencies coordinate their activities to improve consumer protection measures for military families."

Are you a member of the armed forces? What do you think of these protections? Are there other needs that servicemembers have that could be better met by financial institutions and others? Let us know your thoughts below.

At Citi, we are committed to supporting our clients who have served their country. We are reaching out to government agencies and working with many veteran service organizations to help ensure that we provide the highest level of customer service for our military clients. To learn more about the work that Citi is doing for servicemembers and veterans, please see the blog post from our CEO, Vikram Pandit, "Supporting America's veterans." If you are a member of the military and would like to get more information about the mortgage programs we offer, go to https://mortgageprograms.citimortgage.com/military if you are purchasing a home or refinancing an existing mortgage or https://relocation.citimortgage.com/military if you are relocating due to Permanent Change of Station (PCS) orders and need a mortgage.

[1] Prepared Statement of Colonel Shawn Shumake (USA), Director, Office of Legal Policy, Office of the Deputy Under Secretary of Defense, U.S. Department of Defense, before the Committee on Veteran's Affairs, U.S. House of Representatives (Feb. 9, 2011)

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