Human Resources

Educate Staff on SCRA Provisions

The Servicemembers Civil Relief Act policies should address four key points.

June 02, 2011
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Servicemembers Civil Relief Act (SCRA) compliance has been making headlines lately.

One report claims JP Morgan Chase overcharged military families on mortgages or foreclosed on their homes, in violation of SCRA.

And the Consumer Financial Protection Bureau recently named Holly Petraeus to head its Office of Servicemember Affairs. Petraeus urged the largest banks to “take steps to educate all their employees about the financial protections in the Servicemembers Civil Relief Act.” The message is clear: Understand the SCRA provisions, educate your staff, and comply. 

SCRA, amended in 2008, replaces the former Soldiers and Sailors Civil Relief Act of 1940. Its primary goal is to protect military members from the impact of obligations entered into before starting active duty.

The protections cover:

  • Individuals appointed, enlisted, or inducted into the regular branches of the U.S. military service—such as Army, Air Force, Navy, Marines, and Coast Guard;
  • Personnel mobilized in National Guard and Reserve Units; and
  • Commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration.

To effectively educate credit union staff on SCRA provisions, develop and implement written policies and procedures. Policies should address these points of the law: 

  • Reducing the interest rate on a servicemember’s debts incurred prior to military service to no more than 6% per year, upon receiving a written request for relief and a copy of the military orders;
  • Prohibiting rescinding or terminating contracts for purchases of real or personal property, for which the servicemember paid a deposit or made a payment before entering military service;
  • Allowing a servicemember to terminate certain residential and automobile leases after providing the lessor written notice of the termination request along with a copy of the military orders; and
  • Prohibiting sale, foreclosure, or seizure of real or personal property owned by a servicemember before military service, which secures a mortgage, trust deed, or similar security interest, during the military service or for nine months (this reverts back to 90 days on Jan. 1, 2013) thereafter, without a court order. 

Develop detailed procedures to assist staff in handling SCRA questions and requests. Make sure your collection procedures also address SCRA provisions. Once all of the policies and procedures are complete, it’s time to train staff to follow them. All staff who deal with your members on a day-to-day basis must be aware of the law’s requirements so incorporate training into staff meetings. Members’ requests to change their address to an APO/FPO could trigger SCRA discussions. Make this an opportunity to raise awareness on the subject and serve as an example in your community. 

Finally, make sure you’re complying with SCRA. Policies and procedures alone don’t ensure compliance. Management must test and retest data processing systems.

Verify that when you adjust rates to 6% that you’re actually reducing the amount of the payment, not the term of the loan. And, verify whether you’re properly accounting for fees in calculating the 6% and that your data processing system forgives the interest and doesn’t accrue for it. Audit loan files to confirm you’ve received all appropriate paperwork, properly adjusted rates, and created an adequate audit trail to prove to regulators that you’re in compliance. Use resources such as the AIRES examination questionnaire for SCRA to assist in your reviews. 

Our servicemembers and their families make great sacrifices each day. So take the time to understand, educate, and comply with SCRA to show your appreciation.   

ANDREA STRITZKE is vice president, regulatory compliance, for PolicyWorks.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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